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Steel Partners Holdings commences Dutch Auction tender offer to repurchase up to USD49m of its common units.

M2 EQUITYBITES-March 25, 2014-Steel Partners Holdings commences Dutch Auction tender offer to repurchase up to USD49m of its common units

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Steel Partners Holdings LP (SPLP)(NYSE:SPLP), a diversified holding company, announced on Monday the authorisation by its board of directors of a modified 'Dutch Auction' tender offer to purchase for cash up to USD49m value of its common units, no par value, at a price per unit of not less than USD16.50 nor greater than USD17.50 per unit.

Reportedly, the closing price of SPLP's common units on 21 March 2014 was USD15.71.

This offer is expected to commence on Monday 24 March 2014 and expected to expire at 17:00 hours, Eastern Time on 23 April 2014, unless extended or withdrawn. Also, this offer will not be conditioned on any minimum number of units being tendered, however it will be subject to certain customary conditions.

According to the company, this modified Dutch Auction will allow its unit holders to tender their units at a price within the specified range and to do so without incurring any brokerage fees or commissions. Based on the number of units tendered and the prices specified by the tendering unit holders, SPLP will select a single price per unit within the range (the purchase price) that will enable it to purchase USD49m in value of its common units under the offer, or such lesser aggregate amount of its units that are properly tendered.

All units accepted in the offer will be purchased at the same price per unit even if a unit holder tendered at a lower price, SPLP said adding that the company reserves the right in the offer to purchase up to an additional 2% of its common units outstanding.

As on 21 March 2014, SPLP reportedly had 30,792,809 common units issued and outstanding, inclusive of Class A, Class B and Class C units. At the maximum purchase price of USD17.50 per unit, SPLP could purchase 2,800,000 common units if the offer is fully subscribed, which would represent approximately 9.1% of its outstanding common units as of 21 March 2014. At the minimum purchase price of USD16.50 per unit, SPLP could purchase 2,969,697 common units if the offer is fully subscribed, which would represent approximately 9.6% of its outstanding common units as of 21 March 2014.

SPLP plans to fund this offer with cash on hand and borrowings under its existing credit facility. Financing is not a condition to the offer. In the event that more than the maximum number of units sought is tendered, the tendered units will be purchased first, from all holders of 'small lots' of less than 100 units and second, from all other unit holders on a pro rata basis.

SPLP's directors, executive officers and affiliates have advised the company that they do not intend to tender any of their common units in the offer.

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Publication:M2 EquityBites (EQB)
Date:Mar 25, 2014
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