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 14, 2010
ARBINET
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-51063
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13-3930916
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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460
Herndon Parkway, Suite 150
Herndon,
Virginia 20170
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20170
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 703-456-4100
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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x
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive
Agreement.
On
November 11, 2010, Arbinet Corporation (“Arbinet”) announced that it
had entered into a definitive merger agreement with Primus Telecommunications
Group, Incorporated (“Primus”), pursuant to which Primus will acquire Arbinet in
a stock transaction. The Agreement and Plan of Merger, dated November 10, 2010,
or the Merger Agreement, by and among Arbinet,
Primus and PTG Investments, Inc., a wholly owned subsidiary of Primus (“Merger
Sub”) contemplates a merger whereby Merger Sub will be merged with and into
Arbinet, with Arbinet surviving the merger as a wholly owned subsidiary of
Primus.
Arbinet
filed a copy of the Merger Agreement under a Current Report on Form 8-K on
November 12, 2010. The parties to the Merger Agreement have subsequently
discovered ambiguities in need of clarification in the text of certain
provisions of the Merger Agreement, which ambiguities have since been clarified
in Amendment No. 1 to the Agreement and Plan of Merger dated as of December 14,
2010 among Arbinet, Primus and Merger Sub. A copy of Amendment No. 1 to
the Agreement and Plan of Merger is being filed as Exhibit 2.1 hereto, which is
incorporated by reference into this Current Report on Form 8-K.
Important
Information and Where to Find It
In
connection with the proposed acquisition, Primus Telecommunications Group,
Incorporated (“Primus”) will file with the Securities and Exchange Commission
(“SEC”) a Registration Statement on Form S-4 that will include a preliminary
proxy statement of Primus and Arbinet Corporation (“Arbinet”) that also
constitutes a preliminary prospectus of Primus. A definitive joint proxy
statement/prospectus will be sent to security holders of both Arbinet and Primus
seeking their approval with respect to the proposed acquisition. Primus
and Arbinet also plan to file other documents with the SEC regarding the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO
CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS
FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus (when it becomes available) and other
documents filed by Primus and Arbinet with the SEC, without charge, at the SEC’s
web site at www.sec.gov. Copies of the joint proxy statement/prospectus, once
available, and each company’s SEC filings that will be incorporated by reference
in the joint proxy statement/prospectus may also be obtained for free by
directing a request to: (i) Primus at tel: +1.703.748.8050, or (ii) Arbinet via
Andrea Rose or Jed Repko at Joele Frank, Wilkinson Brimmer Katcher at tel:
+1.212.355.4449.
Participants
in the Solicitation
Arbinet,
Primus, and their respective directors, executive officers and other members of
their management and employees may be deemed to be “participants” in the
solicitation of proxies from their respective security holders in connection
with the proposed acquisition. Investors and security holders may obtain
information regarding the names, affiliations and interests of Primus’s
directors, executive officers and other members of its management and employees
in Primus’s Annual Report on Form 10-K for the year ended December 31, 2009,
which was filed with the SEC on April 5, 2010, and amended in a Form 10-K/A
filed with the SEC on April 28, 2010, Primus’s proxy statement for its 2010
annual meeting, which was filed with the SEC on June 14, 2010, and any
subsequent statements of changes in beneficial ownership on file with the
SEC. Investors and security holders may obtain information regarding the
names, affiliations and interests of Arbinet’s directors, executive officers and
other members of their management and employees in Arbinet’s Annual Report on
Form 10-K for the year ended December 31, 2009, which was filed with the SEC on
March 17, 2010, Arbinet’s proxy statement for its 2010 annual meeting, which was
filed with the SEC on April 30, 2010, and any subsequent statements of changes
in beneficial ownership on file with the SEC. These documents can be
obtained free of charge from the sources listed above. Additional information
regarding the interests of these individuals will also be included in the joint
proxy statement/prospectus regarding the proposed transaction when it becomes
available.
Forward-Looking
Statements
This
Current Report on Form 8-K includes “forward-looking statements” as defined by
the Securities and Exchange Commission. All statements, other than statements of
historical fact, included herein that address activities, events or developments
that Arbinet or Primus expects, believes or anticipates will or may occur in the
future, including anticipated benefits and other aspects of the proposed
acquisition, are forward-looking statements. These forward-looking statements
are subject to risks and uncertainties that may cause actual results to differ
materially. Risks and uncertainties that could affect forward-looking
statements include, but are not limited to, the following: the risk that the
acquisition of Arbinet may not be consummated for reasons including that the
conditions precedent to the completion of the acquisition may not be satisfied;
the possibility that the expected synergies from the proposed acquisition will
not be realized, or will not be realized within the anticipated time period; the
risk that Primus’s and Arbinet’s businesses will not be integrated successfully;
the possibility of disruption from the acquisition making it more difficult to
maintain business and operational relationships; any actions taken by either of
the companies, including, but not limited to, restructuring or strategic
initiatives (including capital investments or asset acquisitions or
dispositions); the ability to service substantial indebtedness; the risk factors
or uncertainties described from time to time in Arbinet’s filings with the
Securities and Exchange Commission; and the risk factors or uncertainties
described from time to time in Primus’s filings with the Securities and Exchange
Commission (including, among others, those listed under captions titled
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources — Short- and Long-Term Liquidity
Considerations and Risks;” “— Special Note Regarding Forward-Looking
Statements;” and “Risk Factors” in Primus’s annual report on Form 10-K and
quarterly reports on Form 10-Q) that cover matters and risks including, but not
limited to: (a) a continuation or worsening of global recessionary economic
conditions, including the effects of such conditions on our customers and our
accounts receivables and revenues; (b) the general fluctuations in the exchange
rates of currencies, particularly any strengthening of the United States dollar
relative to foreign currencies of the countries where we conduct our foreign
operations; (c) the possible inability to raise additional capital or refinance
indebtedness when needed, or at all, whether due to adverse credit market
conditions, our credit profile or otherwise; (d) a continuation or worsening of
turbulent or weak financial and capital market conditions; (e) adverse
regulatory rulings or changes in the regulatory schemes or requirements and
regulatory enforcement in the markets in which we operate and uncertainty
regarding the nature and degree of regulation relating to certain services; and
(f) successful implementation of cost reduction efforts. Readers are
cautioned not to place undue reliance on forward-looking statements, which speak
only as of their dates. Except as required by law, neither Arbinet nor Primus
intends to update or revise its forward-looking statements, whether as a result
of new information, future events or otherwise.
Item
9.01 Financial Statements and
Exhibits.
(d)
Exhibits
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Exhibit
Number
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Description
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2.1
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Amendment
No. 1 to the Agreement and Plan of Merger, dated as of December 14, 2010,
by and among Primus Telecommunications Group, Incorporated, PTG
Investments, Inc. and Arbinet
Corporation.
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SIGNATURE
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 hereunto
duly authorized.
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Arbinet
Corporation
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By:
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/s/
Christie A. Hill
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Name:
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Christie
A. Hill
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Title:
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General
Counsel, Secretary and Chief Human Resources
Officer
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Date:
December 15, 2010
Exhibit
2.1
AMENDMENT
NO. 1 TO THE
AGREEMENT
AND PLAN OF MERGER
This
Amendment No. 1 (this “Amendment”) dated as of December 14, 2010 to the
Agreement and Plan of Merger dated November 10, 2010 (the “Merger Agreement” or
the “Agreement”) by and among Primus Telecommunications Group, Incorporated, a
Delaware corporation (“Parent”), PTG Investments, Inc., a Delaware
corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”), and
Arbinet Corporation, a Delaware corporation (the “Company”).
Whereas,
Parent, Merger Sub and the Company have discovered certain ambiguities in need
of clarification in the text of the provisions of the Merger Agreement and
desire to amend the Merger Agreement to make such clarifications.
Now,
therefore, in consideration of the mutual promises contained herein, the
benefits to be derived by each party hereunder and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Parent, Merger Sub and the Company agree as follows:
AGREEMENT:
Section 1.1
Definitions;
References. Unless otherwise specifically defined herein, each term used
herein shall have the meaning assigned to such term in the Merger Agreement.
Each reference to “hereof,” “herein” and “hereunder” and words of similar import
when used in the Merger Agreement shall refer to the Merger Agreement, as
amended by this Amendment. For purposes of clarity, references to the date of
the Agreement, as amended hereby, and references to “the date hereof” and “the
date of this Agreement” shall in all instances continue to refer to November 10,
2010.
Section 1.2
Amendment to
Section 5.1. The last paragraph of Section 5.1 of the Merger
Agreement is hereby amended and restated in its entirety to read as
follows:
Notwithstanding
any of the foregoing provisions of this Section 5.1, prior to the Closing, the
Company may, at its sole option or not at all, either spin-off to its
stockholders, or sell to a third party for cash, the Company’s patents, listed
under items 3, 4 and 5 of Schedule 3.16(b), and
any rights arising from such patents (any sale to a third party for cash is
referred to herein as the “IP
Sale”), provided, that (x) any
spin-off or the IP Sale shall not result in any residual liability to the
Company or any Company Subsidiary (other than costs, fees, expenses and Taxes
taken into account as set forth in the following clause (y)), (y) all
transaction costs, fees and expenses (which for purposes of clarity shall
exclude the appraiser’s fees contemplated in the following clause (z)) and the
gross Tax liabilities of the Company (except to the extent offset by net
operating losses) attributable to any such spin-off or IP Sale shall not exceed
$350,000 in the aggregate and (z) in connection with any such spin-off, the
Company shall have obtained an appraisal, from an independent third party
appraiser, of the value of such patents and rights subject to such spin-off, and
such valuation shall be used for all related Tax reporting
purposes. For the avoidance of doubt, the only assets of the Company
and any Company Subsidiary that may be spun-off or sold pursuant to this
paragraph of Section 5.1 are the Company’s patents listed under items 3, 4 and 5
of Schedule
3.16(b) and the rights arising from such patents. The amount
of the proceeds from the IP Sale, after deduction for all related transaction
costs, fees and expenses and gross Tax liabilities attributable to the IP Sale,
will either, at the Company’s sole discretion, be (i) distributed to the
Company’s stockholders prior to the Closing or (ii) added, dollar for dollar, to
the Aggregate Cash-Value Merger Consideration. Prior to the
consummation of any such spin-off of the Company’s patents or any IP Sale, the
Company shall have first granted to Parent (for its benefit, and the benefit of
its affiliates and assignees of the rights under such license) a royalty-free,
worldwide, assignable (on a non-exclusive basis) and perpetual license and right
to use any and all such patents and associated rights, provided, that in the course
of the negotiation, drafting and creation of such license agreement and the
documents that will effectuate the spin-off or the IP Sale, the Company shall
keep Parent apprised of the status of such negotiation, drafting and creation of
such documents, and, among other things, shall promptly provide all drafts of
such documents and take into consideration, in good faith, any comments received
from Parent with respect to such documents. As part of such license
agreement, to the extent legally possible, the Parent and its affiliates and
assignees of the rights under such license shall be deemed to have had the right
to use such patents and associated rights since the creation of each of such
patents and its associated rights.
Section 1.3
Amendment to
Section 9.4. The last sentence of the definition of Company Material
Adverse Effect in Section 9.4(g) of the Merger Agreement is hereby amended and
restated in its entirety to read as follows:
Notwithstanding
any of the foregoing, it shall constitute a Company Material Adverse Effect if
the sum of the Cash and Cash Equivalents of the Company and the Company
Subsidiaries on a consolidated basis and the Marketable Securities, as of the
Determination Date, as contemplated by Section 6.13, less (x) all indebtedness
then outstanding and (y) all unpaid transaction costs, fees and expenses and
gross Tax liabilities of the Company (except to the extent offset by net
operating losses) attributable to any IP Sale or any spin-off of the Company’s
patents as contemplated by the last paragraph of Section 5.1, and after taking
into account the provisions of Section 5.3 (including the adjustments
contemplated therein), is less than $9,500,000 (provided that such $9,500,000
shall be reduced by the actual transaction costs, fees and expenses and gross
Tax liabilities of the Company (except to the extent offset by net operating
losses) attributable to any IP Sale or any spin-off of the Company’s patents as
contemplated by the last paragraph of Section 5.1 that have been incurred and
actually paid, provided in no event shall more than $350,000 be subtracted from
such $9,500,000), excluding all costs incurred by the Company in connection with
the Merger and the transactions contemplated by this Agreement, which excluded
costs include all legal fees, banker fees, accounting fees, the appraiser’s fees
for the appraisal required under clause (z) of the last paragraph of Section
5.1, and other professional services fees.
Section 1.4
No Further Amendment.
Except as expressly amended hereby, the Merger Agreement is in all respects
ratified and confirmed and all the terms, conditions, and provisions thereof
shall remain in full force and effect.
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Section 1.5.
Effect of Amendment.
This Amendment shall form a part of the Merger Agreement for all purposes, and
each party thereto and hereto shall be bound hereby. From and after the
execution of this Amendment by the parties hereto, any reference to the Merger
Agreement shall be deemed a reference to the Merger Agreement as amended hereby.
This Amendment shall for all purposes be deemed to be in full force and effect
from and after the original execution of the Merger Agreement by the parties
thereto.
Section 1.6
Headings. The
descriptive headings contained in this Amendment are included for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Amendment.
Section 1.7
Counterparts. This
Amendment may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
Section 1.8
Governing Law; Jurisdiction
and Venue. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed in that state. All actions and proceedings
arising out of or relating to this Amendment shall be heard and determined in
the Delaware Court of Chancery or a federal district court located in Delaware.
Each of Parent, Merger Sub and the Company hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the Delaware
Court of Chancery or a federal district court located in Delaware for any
litigation arising out of or relating to this Amendment and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such court), waives any objection to the laying of venue of any such
litigation in the Delaware Court of Chancery or a federal district court located
in Delaware and agrees not to plead or claim that such litigation brought
therein has been brought in any inconvenient forum.
Section 1.9
Waiver of Jury Trial.
EACH OF PARENT, MERGER SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 1.10
Severability. If any
term or other provision of this Amendment is invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Amendment shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Amendment so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
[signature
page follows]
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IN
WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this document to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
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PRIMUS
TELECOMMUNICATIONS GROUP, INCORPORATED
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By:
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/s/ Peter D. Aquino
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| Name: Peter D. Aquino | ||
| Title: Chairman, Chief Executive Officer and | ||
| President | ||
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PTG
INVESTMENTS, INC.
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By:
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/s/ Peter D. Aquino
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| Name: Peter D. Aquino | ||
| Title: President | ||
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ARBINET
CORPORATION
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By:
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/s/ Shawn F. O’Donnell
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| Name: Shawn F. O’Donnell | ||
| Title: Chief Executive Officer and President | ||
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