UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 11, 2011
ARBINET
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
Delaware
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0-51063
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13-3930916
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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460
Herndon Parkway, Suite 150
Herndon,
Virginia 20170
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20170
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
703-456-4100
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
x
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01 Entry
into a Material Definitive Agreement.
On
February 11, 2011, Arbinet Corporation (“Arbinet”) entered into a definitive
asset purchase agreement (the “Asset Purchase Agreement”) with AIP Acquisition
LLC, a Delaware limited liability company (“Buyer”), pursuant to which Buyer
agreed to acquire from Arbinet and certain of its wholly owned subsidiaries, a
portfolio of patents and patent applications and the rights arising from such
patents and patent applications (the “Patent Portfolio”) for an aggregate cash
consideration equal to $4,000,000 and to assume all liabilities associated with
the Patent Portfolio. Pursuant to the terms of the Asset Purchase
Agreement, the Patent Portfolio is being sold on an “as is,” “where is”
basis. The closing of the sale of the Patent Portfolio pursuant to
the Asset Purchase Agreement occurred on February 16, 2011. In
connection with the signing of the Asset Purchase Agreement, Arbinet and Buyer
also entered into a license agreement (the “License Agreement”) that became
effective on February 16, 2011, pursuant to which Buyer granted-back to Arbinet
a royalty-free, worldwide, assignable (on a non-exclusive basis) and perpetual
license and right to use the Patent Portfolio. The foregoing
descriptions of the Asset Purchase Agreement and the License Agreement are
qualified in their entirety by reference to the full text of the Asset Purchase
Agreement and the License Agreement, copies of which are filed as Exhibits 10.1
and 10.2 hereto, respectively, and are incorporated by reference into this Item
1.01 of this Current Report on Form 8-K.
The
Singer Children’s Management Trust (the “Trust”), which
owned approximately 23.1% of Arbinet’s outstanding common stock
and approximately 9.5% of the outstanding common stock of Primus
Telecommunications Group, Incorporated (“Primus”), as of January 7, 2011, is the
sole member of the Buyer. In connection with Arbinet’s proposed
merger with Primus, for which a definitive merger agreement was entered into on
November 10, 2010, the Trust entered into support and voting agreements with
each of Arbinet and Primus, under which the Trust agreed to vote its shares of
Primus and Arbinet, respectively, in favor of the transactions contemplated by
the merger agreement during each company’s special stockholders’ meetings
scheduled for February 25, 2011. Additional information regarding the
proposed merger and the impact of Arbinet’s sale of its Patent Portfolio on the
proposed merger is disclosed in Item 8.01 of this Current Report on Form
8-K.
On
February 14, 2011, Arbinet issued a press release announcing its entry into the
Asset Purchase Agreement and License Agreement. The press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by
reference into this Item 1.01.
Item
2.01 Completion
of Acquisition or Disposition of Assets.
On
February 16, 2011, Arbinet closed the sale of the Patent Portfolio disclosed
under Item 1.01 above. The information contained in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this Item
2.01.
Item
8.01 Other
Events.
Arbinet
previously announced on November 11, 2010, and disclosed on a Current Report on
Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on
November 12, 2010, that it entered into a definitive merger agreement with
Primus Telecommunications Group, Incorporated (“Primus”), pursuant to which
Primus is to acquire Arbinet in a stock-for-stock transaction. In
connection with the proposed merger, Arbinet and Primus filed a definitive joint
proxy statement/prospectus with the SEC on January 19, 2011.
Under the
terms of the merger agreement, Arbinet retained the right, in its sole
discretion, among other options, to sell to a third party for cash
certain identified patents and rights arising from such patents, subject to
certain limitations, including that all transaction costs, fees and expenses and
gross tax liabilities attributable to any such sale would not exceed $350,000 in
the aggregate and that Arbinet would first grant Primus a royalty-free,
worldwide, assignable and perpetual license and right to use any and all such
patents and rights.
On
February 11, 2011, in connection with Arbinet entering into the Asset Purchase
Agreement and License Agreement with respect to the Patent Portfolio, Arbinet
notified Primus of Arbinet’s election to add the net proceeds from the sale of
the Patent Portfolio, dollar for dollar, to the aggregate base merger
consideration of $28,000,000, which will increase the exchange ratio in the
merger to greater benefit Arbinet’s stockholders, as explained
below.
After
deducting fees and expenses associated with the sale of the Patent Portfolio,
Arbinet currently estimates the net proceeds from the sale of the Patent
Portfolio would equal $3,650,000 and the aggregate base merger consideration
would be increased by such net proceeds from $28,000,000 to
$31,650,000. The actual exchange ratio in the merger cannot be
determined until just before closing of the merger because the calculation of
such ratio depends on the number of shares of Arbinet common stock issued and
outstanding immediately prior to the consummation of the merger and shares that
may become issuable as Primus common stock at or after the closing of the merger
in connection with Primus’s assumption of Arbinet’s outstanding warrants,
options, stock appreciation rights and other equity awards (subject to the
exclusion of certain issuable shares that fail to meet certain criteria set
forth in the merger agreement). Therefore, relying on the assumptions
set forth in each of the joint proxy statement/prospectus dated and filed on
January 19, 2011 with the SEC and delivered to Arbinet’s and Primus’s
stockholders of record, and the registration statement, as amended, filed by
Primus on January 14, 2011 with the SEC, other than with respect to the
assumption regarding aggregate base merger consideration, which has been assumed
to be $31,650,000 (instead of $28,000,000, as set forth in the joint proxy
statement/prospectus and the registration statement), the exchange ratio, as of
January 7, 2011, would be expected to be 0.5794 (instead of 0.5126, as set forth
in the joint proxy statement/prospectus and the registration statement) or
approximately one share of Primus common stock for 1.73 shares of Arbinet common
stock owned (instead of one share of Primus common stock for 2.02 shares of
Arbinet common stock owned, as set forth in the joint proxy statement/prospectus
and the registration statement). The actual exchange ratio may vary
significantly from the ratio determined above based on the assumptions in the
joint proxy statement/prospectus and the registration statement and with respect
to the aggregate base merger consideration amount provided above.
It is
anticipated that, immediately following completion of the merger, and based on
the same assumptions as described in the immediately preceding paragraph,
Arbinet stockholders (by virtue of holding Arbinet common stock immediately
prior to the effective time of the merger) would own approximately 24.6% of the
outstanding shares of Primus common stock (instead of 22% of the outstanding
shares of Primus common stock, as set forth in the joint proxy
statement/prospectus and the registration statement).
As
described in the joint proxy statement/prospectus, the stockholder meetings for
both Arbinet and Primus have been set for February 25, 2011. Assuming
all conditions precedent have been satisfied, the merger is expected to close on
February 28, 2011. Under the terms of the License Agreement signed by
Arbinet on February 11, 2011 simultaneous with the sale of the Patent Portfolio,
upon the consummation of the merger between Arbinet and Primus, Primus and each
of its affiliates will automatically be entitled to the same rights and benefits
as Arbinet under the License Agreement without any further action by Arbinet,
Primus, Buyer or any of their respective affiliates.
On
February 14, 2011, Arbinet issued a press release announcing its entry into the
Asset Purchase Agreement and License Agreement. The press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by
reference into this Item 8.01.
Important
Information and Where to Find It
In
connection with the proposed merger, Arbinet and Primus filed a definitive joint
proxy statement/prospectus with the SEC on January 19, 2011. Copies of the
definitive joint proxy statement/prospectus were sent to stockholders of record
of both Arbinet and Primus seeking their approval of certain matters incident to
the proposed merger. Arbinet and Primus also plan to file other
documents with the SEC regarding the proposed transaction. INVESTORS
AND STOCKHOLDERS ARE URGED TO CAREFULLY READ THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and stockholders may obtain a free copy of the definitive joint proxy
statement/prospectus and other documents filed by Arbinet and Primus with the
SEC, without charge, at the SEC’s web site at www.sec.gov. Copies of
the definitive joint proxy statement/prospectus and Primus’s SEC filings that
were incorporated by reference in the definitive joint proxy
statement/prospectus may also be obtained for free by directing a request to:
(i) Primus (703) 748-8050, or (ii) Arbinet (703) 456-4100.
Participants
in the Solicitation
Arbinet,
Primus, and their respective directors, executive officers and other members of
their management and employees may be deemed to be “participants” in the
solicitation of proxies from their respective stockholders in connection with
the proposed merger. Investors and stockholders may obtain
information regarding the names, affiliations and interests of Primus’s
directors, executive officers and other members of its management and employees
in Primus’s Annual Report on Form 10-K for the year ended December 31, 2009,
which was filed with the SEC on April 5, 2010, and amended in a Form 10-K/A
filed with the SEC on April 28, 2010, Primus’s proxy statement for its 2010
annual meeting, which was filed with the SEC on June 14, 2010, and any
subsequent statements of changes in beneficial ownership on file with the
SEC. Investors and stockholders may obtain information regarding the
names, affiliations and interests of Arbinet’s directors, executive officers and
other members of their management and employees in Arbinet’s Annual Report on
Form 10-K for the year ended December 31, 2009, which was filed with the SEC on
March 17, 2010, Arbinet’s proxy statement for its 2010 annual meeting, which was
filed with the SEC on April 30, 2010, and any subsequent statements of changes
in beneficial ownership on file with the SEC. These documents can be
obtained free of charge from the sources listed above. Additional
information regarding the interests of these individuals is also included in the
definitive joint proxy statement/prospectus regarding the proposed
transaction.
Forward-Looking
Statements
This
Current Report on Form 8-K includes “forward-looking statements” as defined by
the SEC. All statements, other than statements of historical fact,
included herein that address activities, events or developments that Arbinet or
Primus expects, believes or anticipates will or may occur in the future,
including anticipated benefits and other aspects of the proposed merger, are
forward-looking statements. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. Risks and uncertainties that could affect forward-looking
statements include, but are not limited to, the following: the risk that the
merger may not be consummated for reasons including that the conditions
precedent to the completion of merger may not be satisfied; the possibility that
the expected synergies from the proposed merger will not be realized, or will
not be realized within the anticipated time period; the risk that Primus’s and
Arbinet’s businesses will not be integrated successfully; the possibility of
disruption from the merger making it more difficult to maintain business and
operational relationships; any actions taken by either of the companies,
including, but not limited to, restructuring or strategic initiatives (including
capital investments or asset acquisitions or dispositions); the ability to
service substantial indebtedness; the risk factors or uncertainties described
from time to time in Arbinet’s filings with the SEC; and the risk factors or
uncertainties described from time to time in Primus’s filings with the
SEC. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of their
dates. Except as required by law, neither Arbinet nor Primus intends
to update or revise its forward-looking statements, whether as a result of new
information, future events or otherwise.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits
Exhibit
Number
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Description
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10.1
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Asset
Purchase Agreement, dated as of February 11, 2011, by and between Arbinet
Corporation and AIP Acquisition LLC.
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10.2
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License
Agreement, effective as of February 16, 2011, by and between Arbinet
Corporation and AIP Acquisition LLC.
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99.1
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Press
release, dated February 14, 2011, announcing the sale of the patent
portfolio.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Arbinet
Corporation
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By:
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/s/
Christie A. Hill
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Name:
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Christie
A. Hill
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Title:
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General
Counsel, Secretary and Chief Human Resources
Officer
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Date:
February 17, 2011
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