Senstar Technologies (SNT) SC 14D9Tender offer solicitation

The name of the subject company is Magal Security Systems Ltd., an Israeli company ("Magal" or the “Company”). The Company's principal executive offices are located at 17 Altalef St., Yehud 5621617, Israel; telephone: +972-3-5391-444.

 

The title of the class of equity securities to which this Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement") relates is the Company's ordinary shares, par value NIS 1.00 per share ("Ordinary Shares" or "Shares"). As of May 31, 2020, there were 23,153,985 Ordinary Shares issued and outstanding.

The name, business address and business telephone number of the Company, which is the subject company and the entity filing this Statement, are set forth in Item 1 above and are incorporated herein by reference. The Company’s website address is www.magalsecurity.com. The information on the Company’s website should not be considered part of this Statement.

 

This Statement relates to the offer by FIMI Opportunity V, L.P, a limited partnership organized under the laws of the State of Delaware and FIMI Israel Opportunity Five, Limited Partnership, a limited partnership organized under the laws of the State of Israel, both limited partnerships which are part of a group of private equity funds known as the FIMI Funds (the “Purchasers”), to purchase from the Company’s shareholders ( the "Shareholders") up to 8,669,029 Ordinary Shares (the “Targeted Number of Shares”), which represent approximately 37.4% of the outstanding Ordinary Shares, and at least 1,200,000 Ordinary Shares which represents approximately 5.2% of the outstanding Ordinary Shares,  at a price of $2.95 per Share, net to the seller in cash (subject to withholding taxes, as applicable), and without interest (the “Offer Price”), upon the terms and subject to the conditions set forth in the Purchasers' offer to purchase (the “Offer”). The Offer is disclosed in a Tender Offer Statement on Schedule TO (the “Schedule TO”), filed by the Purchasers with the Securities and Exchange Commission (“SEC”) on May 22, 2020. The Purchasers' offer to purchase (the “Offer to Purchase”) is filed as Exhibit (a)(1)(A).

 

The Schedule TO states that the Purchasers' principal executive offices are located at Alon Towers 2, 94 Yigal Alon Street, Tel Aviv 6789141 Israel; telephone: +972-3-565-2244.

 

According to the Offer to Purchase, as of May 21, 2020, the Purchasers beneficially owned 9,854,159 Ordinary Shares, representing approximately 42.6% of the Company's outstanding Ordinary Shares and the same percentage of the total voting power represented by all of the Company's outstanding voting securities. Following the successful consummation of the Offer, (i) if the Purchasers purchase the maximum number of Shares, then the Purchasers  will beneficially own 18,523,188 outstanding Ordinary Shares, representing approximately 80.0% of the issued and outstanding of the Company’s Shares, and (ii) if the Purchasers purchase the minimum number of shares, then the Purchasers will beneficially own 11,054,159 of the Company’s outstanding Ordinary Shares, representing  approximately 47.8% of the Company’s outstanding Ordinary Shares.

If the number of Shares that are validly tendered, and not withdrawn, in the Offer exceeds the Targeted Number of Shares, the Purchasers will purchase the Targeted Number of Shares on a pro rata basis from all tendering shareholders.  The proration factor, if any, will be calculated by dividing (x) 8,669,029 Company’s Shares, the number of Shares that the Purchasers are offering to purchase, by (y) the aggregate number of Company’s Shares validly tendered pursuant to the offer and not properly withdrawn.

Except as described or referred to in this Statement, to the Company’s knowledge, as of the date on which this Statement was filed with the SEC, no material agreement, arrangement or understanding exists, nor is there an actual or potential conflict of interest, between (a) the Company, its executive officers, directors or affiliates and (b) the Purchasers and its executive officers, directors or affiliates.

Gillon Beck, a senior partner in the FIMI Funds, serves as a director and an Executive Chairman of the Magal Board of Directors. Gillon Beck is also a member of the board of directors of FIMI Five 2012 Ltd.

Ron Ben-Haim, a partner in the FIMI Funds, is also a member of Magal’s Board of Directors. Messrs. Beck and Ben-Haim do not control the FIMI Funds.

Based upon a determination of the Board of Directors, the Board of Directors of the Company is expressing no opinion and is remaining neutral with respect to the Offer.  The Company urges each Shareholder to make his, her or its own decision as to whether to tender its Shares and, if so, how many Shares to tender. Messrs. Beck and Ben-Haim, directors of the Company, have conflicts of interest (as described in Item 3 above) and did not participate in the consideration of the Offer by our Board of Directors. Each Shareholder should carefully read the Offer to Purchase, the Letter of Transmittal and other materials related to the Offer, and this Statement before making any decision regarding tendering its Shares and make such decision based on all of the available information, including the adequacy of the Offer Price in light of the recent market prices of the Ordinary Shares, the Shareholder’s own investment objectives, the Shareholder’s views as to the Company’s prospects and outlook, the factors described below and any other factors that the Shareholder deems relevant to its investment decision.

 

 

In addition, Shareholders should consult their own financial, tax and legal advisors and make such other investigations concerning the Offer as they deem necessary.

In determining not to express an opinion and to remain neutral with respect to the Offer, the Board of Directors considered a number of factors relating specifically to the Offer, including the following:

To the Company’s knowledge, after making reasonable inquiry, no other executive officer, director, affiliate or subsidiary of the Company currently intends to tender any of the Ordinary Shares which are held of record or beneficially owned by such persons pursuant to the Offer.

Neither the Company nor any person acting on its behalf has, directly or indirectly, employed, retained or compensated any other person to make solicitations or recommendations to Shareholders on its behalf concerning the Offer.

During the past sixty (60) days, no transactions in the Ordinary Shares have been effected by the Company or, to the Company’s knowledge, after making reasonable inquiry, by any executive officer, director, affiliate or subsidiary of the Company.

The Company is not undertaking or engaged in any negotiations in response to the Offer that relate to or would result in (i) a tender offer for or other acquisition of securities of the Company by the Company, any of its subsidiaries or any other person; (ii) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any subsidiary thereof; (iii) a purchase, sale or transfer of a material amount of assets of the Company or any subsidiary thereof; or (iv) a material change in the present dividend rate or policy, indebtedness or capitalization of the Company.

There are no transactions, Board of Directors resolutions, agreements in principle or signed contracts entered into in response to the Offer that relate to or would result in one or more of the events referred to in the first paragraph of this Item 7.

As an Israeli company, the Company is subject to Section 328 of the Israel Companies Law, 1999-5759 (the “Companies Law”). In general, Section 328 provides that a “special tender offer” must be made by a purchaser of shares of a public company if, as a result of the acquisition, the purchaser would own more than 25% of the aggregate voting rights of the company and no other person owns at least 25% of the voting rights. In addition, under the Companies Law, once a shareholder owns in excess of 25% of the outstanding shares of a company, this shareholder may purchase shares in the open market or through private transactions, unless as a result of the purchase the shareholder would own in excess of 45% of the outstanding shares of the company, if no other person owns at least 45% of the voting rights of the Company. Accordingly, in order for the Purchasers to purchase outstanding Ordinary Shares above the 45% threshold, the Purchasers are required to conduct a special tender offer meeting the requirements of Israeli law. Moreover, according to Section 334 of the Companies Law, for a period of one year following the consummation of a special tender offer, none of the bidder in such special tender offer, a person who controlled the bidder during such special tender offer or any entity under their control, may affect another tender offer with respect to shares of the subject company or a merger with the subject company, unless they undertook to effect such transaction as part of the initial special tender offer.

As set forth in the Offer to Purchase, a Shareholder will have no appraisal rights with respect to the Offer, and Shareholders may respond to the Offer by accepting the Offer or notifying the Purchasers of their objection to the Offer. Alternatively, they may simply do nothing and not tender their Shares or object to the Offer. Under the Companies Law, it is a condition to the Offer that the aggregate number of Shares tendered in the Offer is greater than the number of Shares represented in notices of objection. In making this calculation, the Purchasers are required to exclude Shares held by it. In addition, as set forth in the Offer to Purchase, Shareholders who submitted notices of objection with respect to the Offer will be entitled to tender their Ordinary Shares pursuant to the Offer during an additional four calendar-day period commencing at the completion of the “Initial Offer Period”. During this four calendar-day period, Shareholders who have tendered their Ordinary Shares pursuant to the Offer will have no withdrawal rights.

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.