Business Context and Reporting Period
This Form 8-K Current Report, dated February 13, 2015, concerns Matson, Inc. and its wholly-owned subsidiary, Matson Navigation Company, Inc. The filing addresses developments regarding the previously disclosed Agreement and Plan of Merger with Horizon Lines, Inc., originally dated November 11, 2014.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity for Matson, Inc. The only specific financial figure disclosed relates to a modification of the merger agreement's termination fee.
- Termination Fee Adjustment: The fee payable by Horizon to Matson under certain circumstances was reduced from $17,149,600 to $9,500,000.
Material Changes Versus Prior Period
The primary material change reported is the execution of Amendment No. 1 to the Merger Agreement. This amendment reduces the termination fee payable by Horizon Lines, Inc. to Matson, Inc. Additionally, the filing reports the settlement of a consolidated class action lawsuit regarding the merger, which was previously pending in the Delaware Court of Chancery.
Guidance, Outlook, Risks, and Unusual Items
Settlement of Litigation
On February 13, 2015, defendants and plaintiffs in the Consolidated Action reached an agreement in principle to settle and dismiss the lawsuit with prejudice, subject to court approval. The settlement requires Horizon to make supplemental disclosures to its stockholders and includes the reduction of the termination fee mentioned above. The settlement does not affect the merger consideration paid to Horizon stockholders.
Risks and Uncertainties
Management highlights significant risks related to the proposed merger, including:
- Failure to obtain necessary regulatory approvals or the sale of Horizon's Hawaii business.
- Horizon stockholders failing to adopt the merger agreement.
- Uncertainties regarding the timing of the merger and integration of non-Hawaii businesses.
- Potential disruption of management time and operations.
- Failure to realize expected synergies.
- Competitive responses and activist shareholder actions.
Forward-Looking Statements
The filing contains forward-looking statements regarding the expected timing, completion, and effects of the merger. These are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
Important Facts for Investor Verification
- Verify the final court approval of the settlement agreement regarding the Consolidated Action.
- Confirm the terms of the supplemental proxy statement to be filed by Horizon Lines, Inc.
- Monitor the status of regulatory approvals required for the merger and the divestiture of Horizon's Hawaii business.
- Review the full text of Amendment No. 1 to the Merger Agreement (Exhibit 2.1) for details on the reduced termination fee.