Woodbridge Holdings Corporation (NYSE: WDG) announced today that
its board of directors has adopted a shareholder rights plan aimed
at preserving Woodbridge's ability to utilize its net operating
loss carryforwards to offset future taxable income. The rights plan
is similar to shareholder rights plans adopted by several other
public companies with significant net operating loss carryforwards.
Existing shareholders will not be required to divest any shares.
Woodbridge has experienced and continues to experience operating
losses. Under the Internal Revenue Code and rules promulgated by
the Internal Revenue Service, Woodbridge may utilize these net
operating loss carryforwards in certain circumstances to offset
future taxable income and reduce federal income tax liability,
subject to certain requirements and restrictions. However, if
Woodbridge experiences an "ownership change," as defined in Section
382 of the Internal Revenue Code, then Woodbridge's ability to use
the net operating loss carryforwards could be substantially
limited. Generally, there is an "ownership change" if, at any time,
one or more shareholders owning 5.0% or more of a company's common
stock have aggregate increases in their ownership of such stock of
more than 50 percentage points over the prior three-year period.
Accordingly, Woodbridge adopted the rights plan to deter
shareholders from acquiring a 5.0% or greater ownership interest in
Woodbridge's Class A Common Stock.
As part of the adoption of the rights plan, the board of
directors declared a dividend of one right for each share of
Woodbridge's Class A Common Stock and Class B Common Stock held of
record as of the close of business on October 9, 2008. These rights
are not exercisable and are not transferable apart from
Woodbridge's Class A Common Stock or Class B Common Stock, as the
case may be, until the earlier of (i) the tenth business day after
such time as a person or group acquires beneficial ownership of
5.0% or more of Woodbridge's Class A Common Stock and (ii) the
tenth business day after a person or group commences a tender or
exchange offer the consummation of which would result in beneficial
ownership by a person or group of 5.0% or more of Woodbridge's
Class A Common Stock. As a result, subject to certain exceptions
described below, the rights plan will generally cause substantial
dilution to any person or group that acquires beneficial ownership
of 5.0% or more of the outstanding shares of Woodbridge's Class A
Common Stock after October 9, 2008 without the approval of
Woodbridge's board of directors.
Any person or group that owns 5.0% or more of Woodbridge's
outstanding Class A Common Stock as of the close of business on
October 9, 2008 will not trigger exercisability of the rights so
long as they do not acquire any additional shares of Class A Common
Stock or fall under 5.0% ownership of Class A Common Stock and then
re-acquire 5.0% or more of the Class A Common Stock. Additionally,
any person or group who Woodbridge's board of directors determines
inadvertently exceeded the 5.0% threshold can avoid the dilutive
effect of the rights by promptly divesting shares of Woodbridge's
Class A Common Stock so as to reduce its interest below the
threshold level. The rights plan further provides that Woodbridge's
board of directors may, in its sole discretion, exempt any person
or group from the provisions of the rights plan if the board
determines that such person's or group's ownership of Class A
Common Stock would not adversely effect the tax benefits intended
to be preserved by the rights plan.
The rights plan was not adopted in response to any effort to
acquire control of Woodbridge. However, the rights plan may also
have an anti-takeover effect and will be an impediment to a
proposed takeover which is not approved by Woodbridge's board of
directors.
The rights plan will expire on September 29, 2018, unless the
rights are earlier redeemed or exchanged in accordance with the
rights plan or the rights plan is earlier terminated by
Woodbridge's board of directors.
Additional information regarding the rights plan and the rights
will be contained in a Current Report on Form 8-K and in a
Registration Statement on Form 8-A that Woodbridge will be filing
with the Securities and Exchange Commission (the "SEC"). These
filings will be available on the SEC's Internet web site at
www.sec.gov.
About Woodbridge Holdings Corporation
Woodbridge Holdings Corporation, directly and through its wholly
owned subsidiaries, seeks to invest opportunistically within and
outside the real estate industry. Historically, the Company's
operations were primarily within the real estate industry; however,
the Company's current business strategy includes the pursuit of
opportunistic investments and acquisitions within or outside of the
real estate industry, as well as the continued development of
master-planned communities. Under this business strategy, the
Company may not generate a constant earnings stream and the
composition of the Company's revenues may vary widely due to
factors inherent in a particular investment, including the maturity
of the business, market conditions and cyclicality. Net investment
gains and other income that may occur are to be driven by the
Company's strategic initiatives as well as overall market
conditions.
Core Communities, a wholly owned subsidiary, develops
master-planned total-living community environments throughout the
Southeastern United States, including its original and best known,
St. Lucie West. The company's 8,200-acre Tradition(TM) Florida
community is home to more than 1,700 families, vibrant commercial
areas and a 4.5-mile-long employment corridor. The community is
also home to the Florida Center for Innovation at Tradition (FCI)
Research Park, in which The Torrey Pines Institute for Molecular
Studies, Mann Research Center, Martin Memorial Health Systems and
Oregon Health & Science University's Vaccine and Gene Therapy
Institute have all announced plans to locate. Core is also
expanding its Tradition(TM) brand with Tradition(TM) Hilton Head,
an approximate 5,400-acre community planned to include 9,500
residences and 1.5 million square feet of commercial space, which
features a variety of neighborhoods and housing styles, shopping
and dining in Village Square, a Fitness Center & Spa and the
Tommy Fazio-designed Tradition National Golf Course.
Cypress Creek Capital Holdings, LLC, a wholly owned subsidiary,
is a real estate investment banking company. Cypress Creek
Capital's acquisition program focuses on existing commercial income
producing properties in Florida's growth markets. The company
targets office, retail and industrial real estate.
Snapper Creek Equity Management, LLC is a wholly owned
subsidiary of Woodbridge Holdings Corporation focused on activities
related to investing in and acquiring mid-market diverse operating
businesses.
For further information, please visit our websites:
www.WoodbridgeHoldings.com
www.CoreCommunities.com
www.CypressCreekCapital.com
www.SnapperCreek.com
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www.WoodbridgeHoldings.com.
Some of the statements contained herein include forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that involve substantial risks and
uncertainties. Some of the forward-looking statements can be
identified by the use of words such as "anticipate," "believe,"
"estimate," "may," "intend," "expect," "will," "should," "seek" or
other similar expressions. Forward-looking statements are based
largely on management's expectations and involve inherent risks and
uncertainties. These forward-looking statements include statements
about Woodbridge's net operating losses and the effect of the
shareholder rights plan on the likelihood of an "ownership change"
within the meaning of Section 382 of the Internal Revenue Code and
Woodbridge's ability to utilize its net operating loss
carryforwards to offset its future taxable income, including the
risk that Woodbridge may not be in a position to utilize the net
operating loss carryforwards. In addition to the risks and
uncertainties set forth above, investors should also consider the
risks and uncertainties discussed in Woodbridge's filings with the
SEC, including, without limitation, the risks and uncertainties
discussed under the heading "Risk Factors" in such filings.
Woodbridge Holdings Corporation Contact Information: Investor
Relations: Leo Hinkley SVP, Investor Relations Officer Phone: (954)
940-4995 Fax: (954) 940-5320 Email: Email Contact
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