According to Securities and Exchanges Commission filings this week, Cay Clubs' owners Dave Clark & David Schwarz will receive 46.7% less shares than previously proposed. This, according to the filing, "makes the proposed transaction fair to Key's stockholders". (Dave Clark owns two-thirds of Cay Clubs and David Schwarz owns one-third.) So, instead of 50 million shares, the two will recieve a total of approximately 26 million shares. "For purposes of satisfying an indemnification claim, shares of New Key common stock will be valued at $7.50 per share" - this equals nearly $200 million dollars in stock value for the two. Dave Clark will have nearly $132 million on paper.
Big Incentives have also been put into the merger which will reward the two if the company reaches certain financial goals:
"the Clark Trust and Mr. Schwarz may receive up to an aggregate of 32,000,000
additional shares in accordance with the following performance criteria: (i) for
2008, 6,000,000 shares will be earned and issued if net income exceeds $42
million and an additional 5,000,000 shares will be earned and issued if net
income exceeds $52 million; (ii) for 2009, 6,000,000 shares will be earned and
issued if net income exceeds $60 million and an additional 5,000,000 shares will
be earned and issued if net income exceeds $70 million; and (iii) for 2010,
5,500,000 shares will be earned and issued if net income exceeds $72 million and
an additional 4,500,000 shares will be earned and issued if net income exceeds
My previous post about Cay Clubs has gotten a lot of comments. One is signed by Dave Clark, and with the sincerity and passion it includes, I'd believe it was written by him. Who knows - maybe just a huge fan. Then again, it does include his phone number.
Anyway, I don't have anything against Dave Clark. However, I do not think it is "better for the Keys and the people who live here to have a company that is located here, loves the community, cares about the environment and takes the time necessary to fully engage the community before moving forward with re-development plans make purchases than an outside company with no long term commitment or local employees?" The wholesale consuming and regurgitating of the Keys is what is wrong. As the old saying goes: "Don't piss on my leg and tell me its raining".
Mr. Clark, I don't doubt that you are a nice guy and care about your community and give to worthy causes. But rabid overdevelopment, rolling the dice with the community, especially by novice companies, is not what I'm a fan of.
If the merger goes through, Cay Clubs will be a public company soon - and questions of their viability will be answered as their balance sheets come to light.