Marlton Partners Expresses Concern About the Proposed Merger of 180 Degree Capital Corp. and Mount Logan
Marlton Partners, owning 4.6% of 180 Degree Capital Corp. (TURN), has expressed serious concerns about TURN's merger agreement with Mount Logan Capital. The key issues highlighted include:
1. The proposed transformation from a closed-end fund to an alternative asset and insurance solutions company, removing '40 Act protections
2. The Board's failure to provide shareholders an option to tender at net asset value (NAV)
3. The immediate rejection of Source Capital's merger proposal valued at 101% of NAV without any engagement
Marlton questions whether the Board's decisions serve shareholders' interests, particularly noting management's continued employment with Mount Logan post-merger. In response, Marlton has nominated three candidates for election to TURN's Board at the 2025 Annual General Meeting.
Marlton Partners, che possiede il 4,6% di 180 Degree Capital Corp. (TURN), ha espresso serie preoccupazioni riguardo all'accordo di fusione di TURN con Mount Logan Capital. Le principali questioni evidenziate includono:
1. La proposta di trasformazione da un fondo chiuso a un'azienda di soluzioni alternative di asset e assicurazioni, rimuovendo le protezioni del '40 Act.
2. Il mancato offerta da parte del Consiglio ai soci di opzioni per un'offerta di acquisto al valore netto dell'attivo (NAV).
3. Il rifiuto immediato della proposta di fusione di Source Capital, valutata al 101% del NAV, senza alcun coinvolgimento.
Marlton mette in dubbio se le decisioni del Consiglio servano realmente gli interessi degli azionisti, notando in particolare il continuo impiego della direzione con Mount Logan dopo la fusione. In risposta, Marlton ha nominato tre candidati per l'elezione nel Consiglio di TURN nella Riunione Annuale del 2025.
Marlton Partners, que posee el 4.6% de 180 Degree Capital Corp. (TURN), ha expresado serias preocupaciones sobre el acuerdo de fusión de TURN con Mount Logan Capital. Las cuestiones clave destacadas incluyen:
1. La transformación propuesta de un fondo cerrado a una empresa de soluciones de activos alternativos y seguros, eliminando las protecciones de la '40 Act.
2. La falta del Consejo para proporcionar a los accionistas una opción para ofrecer a valor neto de activos (NAV).
3. El rechazo inmediato de la propuesta de fusión de Source Capital, valorada en un 101% del NAV, sin ningún tipo de compromiso.
Marlton cuestiona si las decisiones del Consejo sirven a los intereses de los accionistas, señalando en particular la continuación del empleo de la dirección con Mount Logan tras la fusión. En respuesta, Marlton ha nominado a tres candidatos para ser elegidos en el Consejo de TURN en la Junta General Anual de 2025.
마알턴 파트너스는 180 Degree Capital Corp. (TURN)의 4.6%를 소유하고 있으며, TURN이 Mount Logan Capital와 체결한 합병 계약에 대해 심각한 우려를 표명했습니다. 강조된 주요 이슈는 다음과 같습니다:
1. 폐쇄형 펀드에서 대체 자산 및 보험 솔루션 회사로의 변환 제안으로, '40법의 보호를 제거하는 것입니다.
2. 이사회가 주주에게 순자산 가치(NAV)에서 매각할 옵션을 제공하지 않은 것입니다.
3. Source Capital의 101% NAV로 평가된 합병 제안이 아무런 협의 없이 즉각 거부된 것입니다.
마알턴은 이사회의 결정이 주주의 이익을 충족하는지 의문을 제기하며, 특히 합병 후 마운트 로건과의 경영진 지속 고용에 주목합니다. 이에 대해 마알턴은 2025년 총회에서 TURN 이사 선출을 위해 세 명의 후보를 지명했습니다.
Marlton Partners, détenant 4,6 % de 180 Degree Capital Corp. (TURN), a exprimé de vives inquiétudes concernant l'accord de fusion de TURN avec Mount Logan Capital. Les principales questions soulevées incluent :
1. La transformation proposée d'un fonds fermé en une entreprise de solutions d'actifs alternatifs et d'assurance, supprimant les protections du '40 Act.
2. L'incapacité du Conseil à offrir aux actionnaires une option d'achat à valeur nette d'actif (NAV).
3. Le rejet immédiat de la proposition de fusion de Source Capital, évaluée à 101 % du NAV, sans engagement préalable.
Marlton remet en question si les décisions du Conseil servent les intérêts des actionnaires, soulignant en particulier la continuité de l'emploi de la direction avec Mount Logan après la fusion. En réponse, Marlton a nommé trois candidats pour l'élection au Conseil de TURN lors de l'Assemblée Générale Annuelle de 2025.
Marlton Partners, das 4,6 % von 180 Degree Capital Corp. (TURN) besitzt, hat ernsthafte Bedenken hinsichtlich der Fusionsvereinbarung von TURN mit Mount Logan Capital geäußert. Die hervorgehobenen Hauptprobleme sind:
1. Der Vorschlag zur Umwandlung von einem Geschlossenen Fonds in ein Unternehmen für alternative Anlage- und Versicherungslösungen, wodurch die Schutzmaßnahmen des '40 Act entfernt werden.
2. Das Versäumnis des Vorstands, den Aktionären eine Option zum Rückkauf zum Nettovermögenswert (NAV) anzubieten.
3. Die sofortige Ablehnung des Fusionsvorschlags von Source Capital, der mit 101 % des NAV bewertet wurde, ohne jede Einbindung.
Marlton stellt in Frage, ob die Entscheidungen des Vorstands im Interesse der Aktionäre liegen, insbesondere in Anbetracht der fortdauernden Beschäftigung des Managements mit Mount Logan nach der Fusion. Als Reaktion darauf hat Marlton drei Kandidaten für die Wahl in den TURN-Vorstand bei der Jahreshauptversammlung 2025 nominiert.
- Source Capital's alternative merger proposal valued at 101% of NAV
- No option for shareholders to tender at NAV
- Removal of Investment Company Act of 1940 protections
- Board's immediate rejection of potentially superior merger proposal without engagement
- Potential conflict of interest with management continuing employment at Mount Logan
- Fundamental transformation of business structure without shareholder protection
Insights
This merger situation presents serious corporate governance red flags that warrant investor attention. The proposed transformation from a regulated closed-end fund to an alternative asset company represents a fundamental shift in investment thesis that could significantly alter shareholder protections and risk profiles.
The Board's handling of this transaction raises substantial concerns about their commitment to maximizing shareholder value. Their rejection of Source Capital's proposal at 101% of NAV without any engagement demonstrates potentially questionable decision-making. This is particularly concerning given that Source's offer appears to provide superior immediate value compared to the Mount Logan deal.
The absence of a NAV tender offer option is a critical departure from market standards in similar transactions. Recent precedents in closed-end fund restructurings typically include this fundamental shareholder protection mechanism. This omission, combined with the loss of '40 Act protections, could leave shareholders exposed to increased risks and reduced liquidity options.
Marlton Partners' nomination of three board candidates and their 4.6% ownership stake adds a important activist element to this situation. Their involvement could potentially force the Board to reconsider their approach or pursue a more shareholder-friendly transaction structure.
The potential conflict of interest regarding management's future employment with Mount Logan deserves scrutiny, as it may have influenced the Board's decision-making process and their quick dismissal of Source Capital's proposal. This raises questions about whether the Special Committee maintained true independence in evaluating the transaction.
Highlights Key Terms and Departures from Shareholder Interests
Questions Process and Motivations of 180 Degree Capital Corp.'s Board of Directors' Cavalier Rejection of the Alternative Source Capital Proposal
Highlights Need for Transparency from the TURN Board and a Fair Process to Allow Shareholders to Determine the Right Path Forward
As we await review of the Preliminary Proxy, we are deeply concerned by TURN's definitive merger agreement with Mount Logan.1
First, TURN's Board and management are asking shareholders to approve a fundamental transformation – converting TURN from a closed-end fund regulated under The Investment Company Act of 1940 (the "'40 Act") into an alternative asset and insurance solutions company. In doing so, TURN will diverge from the corporate structure and strategy in which current shareholders invested while also stripping away crucial retail investor protections provided by the '40 Act structure.
Second, the Board has failed to provide shareholders an option to tender at net asset value (NAV), the most basic safeguard for shareholders in transactions of this nature, and one provided in almost every recent comparable deal in this space. When coupled with TURN's prolonged underperformance and total transformation of corporate structure, it makes not providing shareholders the option to receive cash at NAV even more unacceptable.
Further, the Board's cavalier rejection of the potentially superior January 24, 2025 merger proposal from Source Capital ("Source") 2 – which valued TURN at
The refusal to even speak with Source raises questions about whose interests are truly being served in this process. Could it be because TURN's management will continue employment with Mount Logan?3 Given these developments, there are legitimate concerns about whether the Special Committee overseeing the transaction acted with an appropriate level of diligence and impartiality. TURN shareholders deserve a transparent process run by a board that takes its fiduciary duty seriously, and that prioritizes maximizing value rather than advancing a predetermined outcome.
Shareholders should have the option to tender at NAV to realize the full and fair value of their investment, rather than being locked into a new complicated structure. Shareholders should also insist on transparency around the Board's initial process that led to the Mount Logan proposal as well as how they determined – again, without any engagement with Source – that the Source proposal was not and would not reasonably become a superior transaction for shareholders.
We remain confident in the value of TURN, but are disappointed and seriously concerned about how the Board is approaching its duties to its shareholders. TURN's future should not be dictated by a transaction that offers investors no choice for NAV while also stripping away critical 1940 Act protections.
Marlton has nominated three highly qualified and independent candidates – James Elbaor, Gabi Gliksberg and Aaron Morris – for election to the TURN Board of Directors at the Company's 2025 Annual General Meeting of Shareholders. The firm also issued a letter to all TURN shareholders highlighting TURN's underperformance and steep discount to NAV, the full text of which can be found here.
About Marlton Partners L.P.
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THE PARTICIPANTS STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the proxy solicitation are expected to be Marlton Partners, Marlton Partners GP, LLC, Marlton, LLC, James C. Elbaor, Aaron T. Morris, Gabriel D. Gliksberg, ATG Fund II, LLC, ATG Capital Management, LLC (collectively, the "Participants").
As of the date hereof, Marlton Partners is the beneficial owner of 122,752 shares of common stock, par value
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Investors Contact:
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1 180 Capital – Mount Logan Definitive Merger Agreement
2 Source Capital January 24 Merger Proposal Announcement
3 Mount Logan Capital + 180 Degree Capital Corp Strategic Combination Presentation - Slide 7
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SOURCE Marlton Partners L.P.
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