Medley Capital ( MCC ) and FrontFour Capital Group LLC, an investment management group, said Tuesday that they have entered into a settlement related to Medley's planned merger with Sierra Income Corp. and Sierra's proposed concurrent purchase of Medley Management ( MDLY ).
The agreement allows Medley Capital to undertake a "go-shop" process to solicit superior transactions to the merger, and, if the deal is consummated, a settlement fund will be created. It will consist of $17 million of cash and $30 million of Sierra common stock.
As part of the settlement, two new independent directors were named to the company's board, including David Lorber, co-founder of FrontFour.
"We are pleased to have come to an understanding that is expected to provide MCC stockholders with considerably more value in connection with the proposed mergers if consummated, and new, independent voices in the boardroom to help steer the 'go-shop' process to solicit superior transactions," Lorber said in a statement.
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