Falcone’s Harbinger to Raise $280 Million
Harbinger Group Inc. (HRG), the holding company run by hedge-fund manager Philip Falcone, is raising $280 million from a group led by Fortress Investment Group LLC. (FIG)
The investors agreed to purchase 280,000 shares of convertible preferred stock at $1,000 apiece from New York-based Harbinger, according to a filing today with the U.S. Securities and Exchange Commission. The company will use the money for general corporate purposes, which may include investments and acquisitions, the firm said in the filing.
CF Turul LLC, a Fortress fund affiliated with Constantine Dakolias, the co-chief investment officer for the firm’s credit funds, will invest $205 million, the filing shows. Fortress is a New York-based manager of private-equity and hedge funds.
A pair of funds affiliated with Providence Equity Partners Inc. in Providence, Rhode Island, will purchase $50 million of the preferred stock, according to the filing. Wilton Re Holdings Ltd., a Wilton, Connecticut, life reinsurance company, will make a $25 million investment.
The preferred stock will accrue a quarterly cash dividend at an annualized rate of 8 percent and will be convertible into Harbinger common stock at $6.50 a share, according to the filing. That would give investors a 23.6 percent stake in Harbinger based on the company’s 139.2 million shares outstanding as of April 28.
Francis McCarrron, Harbinger’s chief financial officer, declined to comment beyond what was in the filing. Harbinger shares rose 21 cents, or 3.3 percent, to $6.53 at 1:04 p.m. in New York Stock Exchange composite trading.
Batteries and Insurance
Falcone created Harbinger in July 2009 after using his hedge funds to acquire a majority stake in a predecessor company from the family of financier Malcolm Glazer. Harbinger holds a majority stake in Spectrum Brands Holdings Inc., a Madison, Wisconsin-based manufacturer of pet food and batteries, and owns Old Mutual U.S. Life Holdings Inc., a provider of fixed-annuity products.
According to a November filing, Falcone plans to use Harbinger to finance long-term investments in six industries, including consumer products, insurance and financial products, telecom, agriculture, power generation and water and natural resources. The company raised $350 million in November through the sale of five-year bonds at a yield to maturity of 11 percent.
To contact the reporter on this story: Miles Weiss in Washington at mweiss@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
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