FAQ on the Tender Offer
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What is the February 2024 SuRo Capital Modified Dutch Auction Tender Offer?
On February 14, 2024, our Board of Directors authorized a Modified Dutch Auction Tender Offer (the “Tender Offer”) to purchase up to 2 million shares of our common stock at a price per share between $4.00 and $5.00. Assuming 2 million shares tender, SuRo Capital will repurchase approximately 7.9% of our currently outstanding shares.
Why is SuRo Capital initiating this Modified Dutch Auction Tender Offer?
We initiated the Tender Offer because we continue to feel that the market is undervaluing the company’s portfolio. Given that our stock is trading at a significant discount to net asset value (NAV), we believe the Tender Offer to be an efficient and accretive deployment of capital.
What is the timing of the Modified Dutch Auction Tender Offer?
The Tender Offer commenced on February 20, 2024 and will expire at 5:00pm EDT on April 1, 2024, unless extended.
How does the Modified Dutch Auction Tender Offer work?
If the Tender Offer is fully subscribed, the Company will purchase 2,000,000 shares, or approximately 7.9%, of the Company’s outstanding shares of its common stock. Any shares tendered may be withdrawn prior to expiration of the Tender Offer. Stockholders that do not wish to participate in the Tender Offer do not need to take any action. Based on the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest per-share price that will enable it to acquire up to 2,000,000 shares of its common stock. All shares accepted in the Tender Offer will be purchased at the same price even if tendered at a lower price.
At what price will the shares be purchased?
We are conducting an offer by means of a modified “Dutch auction”. We are offering to purchase up to 2,000,000 shares, upon the terms and subject to the conditions of the Tender Offer, at prices specified by the tendering stockholders of not less than $4.00 and not more than $5.00 per share, less any applicable withholding taxes and without interest, for each share of common stock we purchase pursuant to the Tender Offer. We will determine the Purchase Price as promptly as practicable after the Tender Offer expires. We will select the lowest Purchase Price, not less than $4.00 and not more than $5.00 per share, that will allow us to purchase up to 2,000,000 shares, or a lower amount depending on the number of shares properly tendered and not properly withdrawn pursuant to the Tender Offer.
What if a shareholder does not wish to participate in the Modified Dutch Auction Tender Offer?
Stockholders that do not wish to participate in the Tender Offer do not need to take any action.
What is the procedure if a shareholder wishes to tender some or all shares?
This is a three-part answer:
● if your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee and have such nominee tender your shares for you;
● if you hold certificates in your own name, complete and sign a Letter of Transmittal according to its instructions and deliver it, together with any required signature guarantees, the certificates for your shares and any other documents required by the Letter of Transmittal, to Equiniti Trust Company, LLC, the depositary for the Tender Offer (the “Depositary”), at its address shown on the Letter of Transmittal; or
● if you are an institution participating in The Depository Trust Company (“DTC”), which we call the “Book-Entry Transfer Facility” in the Offer to Purchase accompanying our Tender Offer, tender your shares according to the procedure for book-entry transfer described in Section 3 of the Offer to Purchase.
● if your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee and have such nominee tender your shares for you;
● if you hold certificates in your own name, complete and sign a Letter of Transmittal according to its instructions and deliver it, together with any required signature guarantees, the certificates for your shares and any other documents required by the Letter of Transmittal, to Equiniti Trust Company, LLC, the depositary for the Tender Offer (the “Depositary”), at its address shown on the Letter of Transmittal; or
● if you are an institution participating in The Depository Trust Company (“DTC”), which we call the “Book-Entry Transfer Facility” in the Offer to Purchase accompanying our Tender Offer, tender your shares according to the procedure for book-entry transfer described in Section 3 of the Offer to Purchase.
Is the Modified Dutch Auction Tender Offer contingent on a minimum number of shares being traded?
No, the Tender Offer is not contingent on a minimum number of shares being traded.
Who is the information agent for the Modified Dutch Auction Tender Offer and how do I reach them?
The information agent for the Tender Offer is D.F. King & Co. Inc., and the depositary is Equiniti Trust Company, LLC. The offer to purchase (the “Offer to Purchase”), a letter of transmittal and related documents will be mailed to registered holders and certain of our beneficial holders. Beneficial holders may alternatively receive the Offer to Purchase and a communication to consult with their bank, broker or custodian, if they wish to tender shares. For questions and information, please contact the information agent at suro@dfking.com.
What if my bank or broker doesn’t have information on the Modified Dutch Auction Tender Offer?
Banks and brokers may call the information agent at (212) 269-5550, and all others may call the information agent toll-free at (877) 361-7972.
Who is offering to purchase my shares?
We, SuRo Capital Corp, are offering to purchase your shares.
How will the Company pay for the shares?
We will use our available cash on hand to purchase shares in the Tender Offer and to pay related expenses.
How will I be notified if the Company extends or amends the terms of the Modified Dutch Auction Tender Offer?
We will issue a press release no later than 9:00 a.m., Eastern Time, on the business day after the previously scheduled expiration date if we decide to extend the Tender Offer.
How will the Modified Dutch Auction Tender Offer affect the number of our shares outstanding?
As of February 16, 2024, we had 25,353,284 outstanding Shares. If the conditions to the Tender Offer are satisfied or waived and the Tender Offer is fully subscribed at the maximum amount, we will have 23,353,284 shares outstanding immediately following the purchase of shares tendered in the Tender Offer, representing a 7.9% reduction in the number of outstanding shares. The actual number of shares outstanding immediately following completion of the Tender Offer will depend on the number of shares tendered and purchased in the Tender Offer as well as the Purchase Price for such shares.
Stockholders who do not have their shares purchased in the Tender Offer will realize a proportionate increase in their relative ownership interest in the Company following the purchase of shares pursuant to the Tender Offer.
Stockholders who do not have their shares purchased in the Tender Offer will realize a proportionate increase in their relative ownership interest in the Company following the purchase of shares pursuant to the Tender Offer.
Can I change my mind after I have tendered shares in the Modified Dutch Auction Tender Offer?
Yes. You may withdraw any shares you have tendered at any time before the expiration of the Tender Offer, which will occur at 5:00 p.m. Eastern Time, on April 1, 2024, unless we extend or withdraw it. If we have not accepted for payment the shares you have tendered to us by 5:00 p.m., Eastern Time, on April 16, 2024 (the fortieth business day from the commencement of the Tender Offer), you may also withdraw your shares at that time.
Therefore, we may not purchase all of the shares that you tender.
Therefore, we may not purchase all of the shares that you tender.
What is the accounting treatment of the Modified Dutch Auction Tender Offer?
The accounting for the purchase of shares pursuant to the Tender Offer will result in a reduction of our stockholders’ equity in an amount equal to the aggregate purchase price of the shares we purchase and a corresponding reduction in cash and cash equivalents.
What is a recent market price for the shares?
On February 16, 2024, the last reported sale price of the Shares on the Nasdaq was $4.25 per share. You are urged to obtain current market quotations for the shares.
Will I have to pay brokerage fees and commissions if I tender my shares?
If you are a holder of record of your shares and you tender your shares directly to the Depositary, you will not incur any brokerage fees or commissions. If you hold your shares through a broker, dealer, commercial bank, trust company or other nominee and such nominee tenders shares on your behalf, such nominee may charge you a fee for doing so. We urge you to consult your broker or other nominee to determine whether any charges will apply.
What are the U.S. federal income tax consequences if I tender my shares?
Generally, you will be subject to U.S. federal income taxation when you receive cash from us in exchange for the shares you tender. The receipt of cash for your tendered shares generally will be treated for U.S. federal income tax purposes either as (1) a sale or exchange of the tendered shares or (2) a distribution from us in respect of our stock. You should consult your tax advisor regarding the particular tax consequences to you of selling shares pursuant to the Offer to Purchase.
Will I have to pay stock transfer tax if I tender my shares?
If you hold your shares in street name through a broker or other nominee, or instruct the Depositary in the Letter of Transmittal to make the payment for the shares to the registered holder, you will not incur any stock transfer tax.
