DEFA14A: TrueCar Acquisition Recommended by ISS, Glass Lewis

Leading independent proxy advisory firms ISS and Glass Lewis recommend TrueCar stockholders vote FOR the pending acquisition by Fair Holdings, Inc.

Summary

• Independent proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis & Co., LLC (Glass Lewis) have recommended that TrueCar, Inc. stockholders vote FOR the proposed acquisition by Fair Holdings, Inc.
• Fair Holdings, Inc. is an entity led by TrueCar founder Scott Painter and is backed by an equity commitment from Alpha Auto 2, LLC.
• The TrueCar Board of Directors unanimously concluded that the transaction is in the best interests of all stockholders, citing a compelling and immediate cash premium.
• A Special Meeting of Stockholders is scheduled for December 22, 2025, to vote on the transaction.
• The transaction is expected to close in the fourth quarter of 2025 or early 2026, subject to stockholder approval and other closing conditions.

Sentiment

Score: 8

Explanation: The sentiment is highly positive due to the unanimous board recommendation and the strong endorsement from two leading independent proxy advisory firms (ISS and Glass Lewis) for the merger, which is stated to offer a 'compelling and immediate cash premium' to stockholders. While risks are disclosed, the overall tone and key actions point towards a favorable outcome for shareholders.

Positives

• Leading independent proxy advisory firms ISS and Glass Lewis recommend TrueCar stockholders vote FOR the pending transaction.
• The transaction offers a compelling and immediate cash premium for TrueCar stockholders.
• TrueCar's Board of Directors unanimously supports the acquisition, deeming it the right path forward and in the best interests of all stockholders.

Negatives

• The transaction may not be completed in a timely manner or at all.
• Fair Holdings' ability to obtain additional equity financing for the transaction is a risk.
• Failure to satisfy closing conditions, including regulatory approvals and stockholder approval, could prevent the merger.
• TrueCar may be required to pay a termination fee under certain circumstances if the transaction agreements are terminated.
• The announcement and pendency of the transaction could negatively affect TrueCar's business relationships, operating results, and overall business.

Risks

• The risk that the pending transaction may not be completed in a timely manner or at all.
• The ability of the Investor and Parent (Fair Holdings) to obtain additional equity financing in connection with the pending transaction.
• The failure to satisfy any of the conditions to the consummation of the pending transaction, including the receipt of certain regulatory approvals (if required) and stockholder approval.
• The occurrence of any event, change or other circumstance or condition that could give rise to the termination of the transaction agreements, including in circumstances requiring TrueCar to pay a termination fee.
• The effect of the announcement or pendency of the transaction on TrueCar's business relationships, operating results and business generally.
• The risk that the pending transaction disrupts TrueCar's current plans and operations.
• TrueCar's ability to retain and hire key personnel and maintain relationships with key business partners and customers, and others with whom it does business.
• Risks related to diverting management's attention from TrueCar's ongoing business operations.
• Significant or unexpected costs, charges or expenses resulting from the pending transaction.
• Potential litigation relating to the pending transaction that could be instituted against the parties to the transaction agreements or their respective directors, managers or officers, including the effects of any outcomes related thereto.
• Uncertainties related to the continued availability of capital and financing.
• Certain restrictions during the pendency of the transaction that may impact TrueCar's ability to pursue certain business opportunities or strategic transactions.
• Uncertainty as to timing of completion of the pending transaction.
• The impact of adverse general and industry-specific economic and market conditions.
• Other risks described in TrueCar's filings with the SEC, including under the heading Risk Factors in its Annual Report on Form 10-K for the year ended December 31, 2024, and any Quarterly Report on Form 10-Q or Current Report on Form 8-K that contain updates thereto.

Future Outlook

The transaction is expected to close in the fourth quarter of 2025 or early 2026, subject to stockholder approval and satisfaction of other closing conditions. The company does not undertake to update forward-looking statements except as required by law.

Management Comments

• "ISS and Glass Lewis, as independent voices, support our Boards unanimous conclusion that the pending transaction with Fair Holdings represents the right path forward for the Company and is in the best interests of all TrueCar stockholders."
• "With the Special Meeting approaching, consistent with the leading proxy advisors recommendations, we encourage all TrueCar stockholders to vote FOR the transaction TODAY."

Industry Context

TrueCar operates as a leading automotive digital marketplace, connecting buyers and sellers to a nationwide network of Certified Dealers. The acquisition by Fair Holdings, led by TrueCar founder Scott Painter, signifies a strategic move within the automotive digital retail and finance innovation sector, potentially leveraging Painter's extensive experience and other ventures like Autonomy.

Legal Proceedings

• Potential litigation relating to the pending transaction that could be instituted against the parties to the transaction agreements or their respective directors, managers or officers.

Related Party Transactions

• Fair Holdings, Inc., the acquiring entity, is led by TrueCar founder Scott Painter, indicating a transaction involving a former key executive.

Stakeholder Impact

• Shareholders: Expected to receive a compelling and immediate cash premium upon completion of the merger.
• Employees: Risk of disruption to current plans and operations, and challenges in retaining and hiring key personnel.
• Business Partners and Customers: Potential impact on business relationships and the ability to maintain them during the pendency of the transaction.

Next Steps

• TrueCar stockholders are encouraged to vote FOR the transaction.
• A Special Meeting of Stockholders will be held on December 22, 2025, to vote on the transaction.
• The transaction is expected to close in the fourth quarter of 2025 or early 2026, subject to stockholder approval and other closing conditions.

Key Dates

Recommendation

The filing indicates a strong likelihood of the merger closing, supported by unanimous board approval and recommendations from leading proxy advisory firms, ISS and Glass Lewis. The transaction offers a 'compelling and immediate cash premium' to stockholders. For investors, buying shares now to capture this premium before the expected close in late 2025 or early 2026 presents an attractive arbitrage opportunity, assuming the deal's completion is highly probable.

Keywords

TrueCar, Fair Holdings, Acquisition, Merger, Proxy Statement, ISS, Glass Lewis, Stockholder Vote, Automotive Digital Marketplace, Scott Painter