DEFA14A: Victory Capital Addresses Stockholder Lawsuits with Supplemental Proxy Disclosures

Victory Capital provides supplemental disclosures to its proxy statement to address stockholder litigation related to the proposed acquisition of Amundi US, while reaffirming its recommendation for stockholders to approve the deal.

Summary

• Victory Capital Holdings is supplementing its proxy statement related to the proposed acquisition of Amundi US in response to stockholder litigation.
• Two complaints were filed in the New York Supreme Court alleging a materially incomplete and misleading proxy statement.
• Victory received five demand letters from stockholders making similar allegations.
• The lawsuits claim negligent misrepresentation, concealment, and negligence under New York common law.
• Plaintiffs seek to enjoin the transaction, rescind it, or receive damages, plus legal fees.
• Victory denies the allegations but is providing supplemental disclosures to avoid delays and minimize litigation costs.
• The supplemental disclosures relate to financial forecasts and the opinion of PJT Partners, Victory's financial advisor.
• These disclosures will not change the consideration paid to Amundi or the timing of the special meeting on October 11, 2024.
• The Board continues to recommend that Victory stockholders vote FOR the proposals to be voted on at the Special Meeting described in the Proxy Statement.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there are legal challenges, the company is proactively addressing them and reaffirming its confidence in the Amundi US acquisition. The supplemental disclosures aim to provide greater transparency and clarity to investors.

Positives

• Victory Capital is proactively addressing stockholder concerns to minimize potential delays to the Amundi US acquisition.
• The company reaffirms its belief that the allegations are without merit and that the original disclosures comply with applicable laws.
• The supplemental disclosures aim to provide additional transparency and clarity to stockholders.

Negatives

• Stockholder litigation and demand letters indicate concerns about the completeness and accuracy of the proxy statement.
• The need for supplemental disclosures suggests potential weaknesses in the initial disclosures.
• Legal proceedings, even if ultimately unsuccessful, can be costly and disruptive to management's focus.

Risks

• The stockholder litigation could potentially delay or prevent the completion of the Amundi US acquisition.
• Adverse rulings in the litigation could result in financial damages or other penalties for Victory Capital.
• The litigation could negatively impact investor sentiment and the company's stock price.

Future Outlook

The document does not provide a specific future outlook beyond the completion of the Amundi US acquisition and the resolution of the stockholder litigation. It mentions forward-looking statements related to the proposed Contribution and the outlook for Victory Capital's or Amundi's future business and financial performance, but cautions that these statements involve risks and uncertainties.

Management Comments

• Victory believes that the allegations contained in the Litigation Matters are without merit, that the disclosures in the Proxy Statement comply with applicable laws, and that no further disclosures are required to supplement the Proxy Statement under applicable laws.
• The Board continues to recommend that Victory stockholders vote FOR the proposals to be voted on at the Special Meeting described in the Proxy Statement.

Industry Context

The document relates to the asset management industry, specifically Victory Capital's efforts to expand through acquisition. The litigation and supplemental disclosures highlight the increased scrutiny and potential legal challenges associated with M&A transactions in the financial sector.

Comparison to Industry Standards

• The document references selected publicly traded companies in the traditional asset management and multi-boutique sectors for comparable company analysis.
• PJT Partners used metrics like P/CY2025E Adj. EPS and TEV/CY2025E Adj. EBITDA to compare Victory Capital to its peers.
• The analysis included a range of multiples observed in these comparable companies, providing context for Victory Capital's valuation.

Legal Proceedings

• Two complaints have been filed in the Supreme Court of the State of New York, New York County by purported Victory stockholders against Victory and the members of the Victory board of directors.
• Victory received five demand letters from purported Victory stockholders alleging similar insufficiencies in the disclosures in the Preliminary Proxy Statement and/or the Proxy Statement.

Stakeholder Impact

• Shareholders are impacted by the potential dilution from the share issuance related to the Amundi US acquisition.
• The litigation and supplemental disclosures may cause uncertainty and concern among shareholders.
• Employees of both Victory Capital and Amundi US may be affected by the integration of the two companies.

Next Steps

• Victory Capital will hold a special meeting of stockholders on October 11, 2024, to vote on the share issuance related to the Amundi US acquisition.
• The company will continue to defend itself against the stockholder litigation.

Key Dates

Keywords

Victory Capital, Amundi US, acquisition, proxy statement, stockholder litigation, supplemental disclosures, financial forecasts, PJT Partners, special meeting, merger