By Angela McDaniels
Tacoma, Wash., Oct. 9 - First American Corp. has begun its exchange offer for all publicly held shares of its subsidiary, First Advantage Corp., according to a company news release.
The company first offered to acquire First Advantage in June and plans for the exchange offer were announced Thursday.
First American is offering 0.58 shares of its common stock for each share of First Advantage common stock. Based on First American's closing stock price on Thursday, the exchange ratio represents an offer price of $18.37 per share.
A special committee of the First Advantage board of directors, consisting of directors unaffiliated with First American, is recommending that First Advantage stockholders tender their shares in the offer.
The exchange offer will expire at 5 p.m. ET on Nov. 10.
First American currently owns indirectly or controls about 80% of First Advantage's common stock.
The exchange offer is subject to a non-waivable condition that the exchange offer be accepted by the holders of a majority of the outstanding shares of First Advantage common stock held by the public.
It is also subject to a waivable condition that First American must own or control at least 90% of each class of outstanding First Advantage shares upon completion of the exchange offer, after giving effect to the conversion of the class B shares into class A shares on a one-for-one basis.
If the offer is successfully completed, First American will acquire any remaining shares at the same exchange ratio through a short-form merger.
First American is a Santa Ana, Calif., business information company.
Poway, Calif.-based First Advantage provides risk mitigation and business services.
| Acquirer: | First American Corp.
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| Target: | First Advantage Corp.
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| Announcement date: | Oct. 8
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| Price per share: | 0.58 First American shares
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| Expected closing: | November 2009
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| Stock price for target: | Nasdaq: FADV: $18.66 on Oct. 7
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| Stock price for acquirer: | NYSE: FAF: $32.51 on Oct. 7
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