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) DECEMBER 8, 1999
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LASER MORTGAGE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 001-13563 22-353916
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
65 EAST 55TH STREET, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: 212-758-6200
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On December 9, 1999, the Registrant issued a press release announcing
that its Board of Directors had received and, after review, rejected a second
unsolicited offer from Ellington Management Group, LLC ("Ellington"). Subject to
certain terms and conditions, Ellington sought the support of the Board of
Directors for a tender to purchase up to 100% of the outstanding shares at a
price of $4.30 per share. The Board viewed this proposal as not in the best
interests of shareholders. The Registrant also announced that Mariner Mortgage
Management, LLC, the Registrant's external manager, informed the Board that it
has made substantial progress in preparing the asset sales consistent with the
announced schedule, which calls for closings in January of 2000.
The complete text of the letter from Ellington setting forth the terms
of the offer is set forth as Exhibit 99.1 hereto. The complete text of the
response letter from the Registrant to Ellington is set forth as Exhibit 99.2
hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Statements
None.
(c) Exhibits
99.1 Letter to the Registrant from Ellington Management Group, LLC, dated
December 8, 1999.
99.2 Letter from the Registrant to Ellington Management Group, LLC, dated
December 9, 1999.
99.3 Press Release, dated December 9, 1999.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
LASER MORTGAGE MANAGEMENT, INC.
By: /s/ William J. Michaelcheck
-----------------------------
Name: William J. Michaelcheck
Title: President
Dated: December 9, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 Letter to the Registrant from Ellington Management Group, LLC.
99.2 Letter from the Registrant to Ellington Management Group, LLC.
99.3 Press Release, dated December 9, 1999.
EXHIBIT 99.1
[Ellington Management Group, L.L.C. Letterhead]
December 8, 1999
VIA FACSIMILE
Fredrick N. Khedouri
Chairman of the Board of Directors
Laser Mortgage Management, Inc.
151 West Passaic Street
Rochelle Park, NJ 07662
Dear Fred:
In our letter of November 5th, we at Ellington Management Group proposed
that our funds acquire, in a negotiated transaction, up to 100% of the
outstanding shares of Laser at a price of $4.15 per share. On November 12th, in
an effort to improve our bid, we requested certain information pertaining to the
expenses that the Company could be expected to incur in connection with a sale
of the Company to Ellington. Having been supplied some of this information as
recently as December 6th, we are now prepared to revise our proposal.
Upon review of the information supplied to us, we are now proposing to
purchase up to all outstanding Laser shares at $4.30 per share. This price
represents a premium of approximately 12.8% over Laser's closing share price on
12/6/99 of $3.8125, and represents a premium of approximately 18.6% over the
average trading price of Laser shares over the past six months. This proposal is
based on our current knowledge of Laser's portfolio; to the extent existing
assets are liquidated, our valuation could be adversely impacted.
We are committed to engaging in this transaction. In light of the recent
information supplied to us, we believe that we can substantially simplify our
due diligence by eliminating the uncertainties in transaction-related expenses.
To this end, we have incorporated into our proposal the assumption that certain
third party expenses will not exceed certain levels, and that, as part of the
due diligence process, these expenses will in fact be capped at or below such
levels. Specifically, we are assuming that all payments (including termination
fees) to the manager, Mariner Mortgage Management, will total no more than $1
million. We are also assuming that the total fees paid to your advisor, Lehman
Brothers, will not exceed $1.1 million; therefore if $600,000 in Lehman fees
have been accrued and/or paid to date, as is our understanding, then we are
assuming that remaining Lehman fees will not exceed $500,000. Finally, we are
assuming that all other future transaction-related expenses will not exceed
$250,000 (for example, $125,000 in legal fees and $125,000 in miscellaneous
expenses).
Our proposal is conditioned only upon the completion of mutually acceptable
definitive documentation and the satisfactory completion of our due diligence.
We and our advisors are prepared to meet with Laser and its advisors to
negotiate and finalize all the documentation necessary to reflect the
transaction described above as soon as we receive an executed copy of the
enclosed exclusivity letter agreement.
We propose a two step transaction pursuant to which we would commence a
tender offer that receives the full support and recommendation of the Laser
board, to be followed by a back- end merger. The tender offer would be subject
to customary conditions, including that there be tendered such number of shares
that, when taken together with the shares we already own, will constitute at
least a majority of the outstanding Laser shares on a fully diluted basis and
that the Laser board take all necessary actions to render the provisions of
Article IX of the Laser charter inapplicable to the offer and the merger. In the
event our respective advisors determine that the REIT provisions under the
Internal Revenue Code render a two-step transaction impracticable, we would
restructure our proposal as a one step merger.
We believe such a transaction would be extremely attractive to Laser's
shareholders and would have their full support. Shareholders would receive a
premium for their shares, and would not have to be concerned with the existing
uncertainties related to their ownership of Laser, including those risks and
uncertainties associated with the performance and disposition of the illiquid
and esoteric derivative securities which remain in Laser's portfolio even long
after the resignation of the original manager.
In order for us to commit the resources and incur the expenses that are
necessary to undertake a transaction of this type, we require that you execute
the enclosed letter agreement providing us with a 30-day exclusivity period to
complete our diligence and finalize all necessary documentation. Please let us
know how you would like to proceed by the close of business on Friday, December
10th, 1999. If we have not received a meaningful response from you by that date,
our proposal will expire and we will discontinue any further pursuit of a
transaction involving the acquisition of the Company.
Very truly yours,
ELLINGTON MANAGEMENT GROUP, L.L.C.
By: VC Investments, L.L.C., as managing member
By: /s/ Michael Vranos
------------------------------
Michael Vranos
Managing Member
EXHIBIT 99.2
LASER MORTGAGE MANAGEMENT, INC.
December 9, 1999
Ellington Management Group, L.L.C.
53 Forest Avenue
Old Greenwich, CT 06870
Gentlemen:
The Board of Directors of Laser Mortgage Management has reviewed the letter
you transmitted to me via e-mail yesterday. We concluded that the Board would be
unable to recommend that our shareholders participate in a tender offer on the
terms proposed in your letter, even assuming the most favorable outcome of the
contingent elements.
Given the history of our discussions and the lack of a material improvement
in terms from your initial offer, we do not believe that it would be in the
Company's interest to enter into negotiations with you within the framework of
your letter.
Very truly yours,
/s/ Frederick N. Khedouri
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Frederick N. Khedouri
Chairman of the Board of Directors
LASER Mortgage Management, Inc.
EXHIBIT 99.3
LASER MORTGAGE MANAGEMENT REJECTS
PROPOSAL FROM ELLINGTON MANAGEMENT GROUP
New York, New York, December 9, 1999. LASER Mortgage Management, Inc.
(NYSE: LMM) announced today that its Board of Directors had received and, after
review, rejected a second unsolicited offer from Ellington Management Group,
LLC. Subject to certain terms and conditions, Ellington sought the support of
the Board of Directors for a tender to purchase up to 100% of the outstanding
shares at a price of $4.30 per share. The Board viewed this proposal as not in
the best interests of shareholders.
At its meeting, the Board also received a report from the Company's
external manager, Mariner Mortgage Management, LLC, on the status of the
previously announced sale of certain of the Company's assets. Mariner informed
the Board that it has made substantial progress in preparing the asset sales
consistent with the announced schedule, which calls for closings in January of
2000.
LASER Mortgage Management, Inc. is a specialty finance company investing
primarily in mortgage-backed securities and mortgage loans. The Company has
elected to be taxed as a real estate investment trust under the Internal Revenue
Code of 1986, as amended.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE MANAGEMENT,
INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING" STATEMENTS
THAT INVOLVE RISK AND UNCERTAINTIES
Date: December 9, 1999
Contact: LASER Mortgage Management, Inc.
William J. Michaelcheck
President and Chief Executive Officer
212-758-6200
