ISS recommends MDC Companions (MDCA) shareholders vote “FOR” for the amended transaction with Stagwell

NEW YORK–(BUSINESS WIRE) –(NASDAQ: MDCA) – MDC Partners Inc. (“MDC Partners” or the “Company”) announced today that Institutional Shareholder Services Inc. (“ISS”), a leading independent proxy advisory firm, has withdrawn its previous voting recommendation.

ISS is now recommending that MDC Partners shareholders vote in favor of the proposal to approve the merger of MDC with Stagwell Media LP, which will bring Stagwell Marketing Group Holdings LLC ("Stagwell"), at the special meeting of shareholders scheduled for July 26.02.2021 .

Irwin D. Simon, Lead Independent Director and Chair of the Special Committee of MDC Partners, commented, “We are pleased that ISS is recommending that MDC shareholders vote in favor of the proposed transaction with Stagwell. This recommendation clearly underscores our firm belief that the merger with Stagwell is both financially and strategically compelling and offers the best way to maximize value for all MDC shareholders. We urge all MDC shareholders to vote for the amended Stagwell agreement and related proposals. "

Mark Penn, Chairman and CEO of the company, added, “This transaction offers the best opportunity to create value for MDC shareholders, who have significant stakes in a scaled company well positioned in some of the world's fastest growing segments Digital marketing and advertising. We continue to believe that the combination with Stagwell will put MDC on the right growth path and we are pleased that ISS recognizes the merits of this transaction. "

In its report, the ISS concluded: 1

  • "… the changed terms appear to capture a sufficient part, if not all, of the improvement in MDC's implied equity value, the transaction has a strong strategic rationale, and there is downside risk to rejecting the transaction."

The ISS also determined that: 1

  • "The transaction appears to be a complementary combination of Stagwell's rapidly growing digital services businesses with the strategic and creative resources of MDC Partners."

  • "… the proposed merger appears to offer MDC shareholders an otherwise unavailable opportunity to get involved in faster-growing, higher-margin segments of the marketing and advertising industry."

  • "… (MDC) shareholders will be better off as 31 percent shareholders in the combined company than as 100 percent shareholders in the stand-alone MDC."

MDC Partners shareholders are reminded that no matter how many shares they own, their vote is extremely important. To follow the recommendations of ISS and the company's board of directors, shareholders should vote "FOR" today on the proposal on the WHITE Power of Attorney to approve the transaction and ensure the immediate and compelling value of the proposed transaction.

As previously announced, the company's special meeting of shareholders to vote on the transaction will be adjourned to Monday, July 26, 2021 at 11:00 a.m. ET. It can be accessed virtually at https://web.lumiagm.com/401933402. The company has also extended the planned acceptance deadline for proxy voting for the special meeting and is accepting powers of attorney and instructions, including electronic voting, until Thursday, July 22, 2021.

Shareholders with questions about the Special Meeting and the Modified Transaction should call 1-877-659-1821 (toll free within North America) or 1-416-867-2272 (outside North America) or email contactus @ kingsdaleadvisors .com.

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communication networks in the world. Celebrated as "The Place Where Great Talent Lives" MDC Partners for its innovative advertising, PR, branding, digital, social and event marketing agency partners for some of the most memorable and effective campaigns for the most respected in the world brands are responsible. Leveraging technology, data analytics, insights, and strategic consulting solutions, MDC Partners drives creative excellence, business growth, and measurable returns on marketing investments for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at mdc-partners.com, sign up for investor updates and notifications, and follow us on LinkedIn.

About the Stagwell Marketing Group

Stagwell Marketing Group is the first and only independent, digitally first and fully integrated organization of size and scale service brands across the continuum of marketing services. Collaborative from the ground up, Stagwell is not burdened by old viewpoints, and its employees agree in their desire to innovate, develop, grow and deliver superior results for their customers. Stagwell's high-growth brands include experts in four categories: digital transformation and marketing, research and intelligence, marketing communications, and content and media. Stagwell is a private equity fund that holds all shares in Stagwell Marketing Group LLC through a wholly owned holding company called Stagwell Marketing Group Holdings LLC. Stagwell Marketing Group LLC and its businesses are managed by The Stagwell Group, a registered investment advisor. Stagwell's address is 1808 Eye Street, Floor 6, Washington, DC, 20006. As of today, Stagwell and its affiliates own 50,000 Series 6 preferred shares (representing 100% of the outstanding Series 6 preferred shares) and 14,425,714 Class A shares -Shares (equivalent to 18.7% of the outstanding Class A Subordinated Voting Shares) of MDC, which together represent 19.9% ​​of the issued and outstanding Class A Subordinated Voting Shares of MDC calculated on a converted basis. Stagwell and its affiliates' beneficial ownership of MDC securities will not change after the announcement of the foregoing.

A copy of the Stagwell Early Warning Report, which is required by Canadian securities laws to be filed on www.sedar.com (“SEDAR”) in connection with the matters described in this press release, can be obtained through Stagwell's SEDAR profile or by contacting Stagwell at contact details given below.

Cautionary Note Regarding Forward-Looking Statements

This release may contain certain forward-looking statements (collectively, "Forward-Looking Statements"). Statements in this document that are not historical facts, including statements about Stagwell's beliefs and expectations and recent business and economic trends, are forward-looking statements. Words such as "estimate", "project", "aim", "predict", "believe", "expect", "foresee", "potentially", "create", "intend", "could", "should," “would”, “could”, “foresee”, “plan”, “will”, “guide”, “look”, “outlook”, “future”, “assume”, “predict”, “focus”, “continue” "or the negation of such terms or other variations thereof and terms with similar content used in connection with discussing current plans, estimates and projections are subject to change due to a number of factors, including those described in this section. Such forward-looking statements may include, but is not limited to, statements relating to: future financial results and the prospects for the future of the respective businesses and operations of Stagwell, MDC and the combined company; information about the transaction; the expected benefits of the transaction; the likelihood of closing r transaction; the expected outcome of the transaction; the tax implications of the Transaction for MDC and MDC's shareholders; the timing of the shareholders' meeting to approve the Transaction (the "Special Meeting"); the consents of the shareholders required for the transaction; regulatory and stock exchange approval of the transaction; and when the transaction was carried out. A number of important factors could cause actual results to differ materially from those in forward-looking statements, including the risks identified in our filings with the SEC.

These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the control of Stagwell. Important factors that could cause actual results and expectations to differ materially from those expressed in such forward-looking statements include the risks and uncertainties set out in the “Risk Factors” section of the Proxy Statement / Prospectus. These and other risk factors include but are not limited to the following:

  • the inability to obtain the anticipated benefit from the Transaction or the occurrence of difficulties related to the Transaction;

  • adverse tax consequences in connection with the Transaction for MDC, its business and its shareholders that may differ from MDC or Stagwell's expectations, including future changes in tax law, potential increases in corporate tax rates in the United States and disagreements with the tax authorities in the investigation the value of MDC and the calculation of its tax attributes can lead to increased tax costs;

  • the incurrence of material federal Canadian income tax (including a material "emigration tax") as a result of the Transaction;

  • the impact of the uncertainty surrounding the Transaction on the respective businesses of Stagwell and MDC;

  • direct or indirect costs related to the transaction that could turn out to be higher than expected;

  • the risk that a condition for the completion of the transaction is not met and the transaction cannot be completed; and

  • the risk of parties contesting the transaction or the impact of the transaction on MDC's debt arrangements.

You can obtain copies of MDC's filings from its profile on SEDAR at www.sedar.com, its profile on the SEC website at www.sec.gov, or its website at www.mdc-partners.com. Stagwell assumes no obligation to update forward-looking statements as a result of new information, future developments or otherwise, unless expressly required by law. All forward-looking statements in this release are restricted in their entirety by this cautionary note.

No offer or solicitation

This announcement does not constitute an offer to buy or exchange, or a solicitation of an offer to sell or exchange, nor is there a sale of any securities in any jurisdiction in which such offer, sale or exchange is made prior to registration or qualification under the securities laws of any such jurisdiction. This announcement is not a substitute for any prospectus, proxy statement, or other document that MDC or any newly incorporated company ("New MDC") may file with the SEC in connection with the Transaction. Funds, securities, or other consideration are not solicited and, if sent in response to the information contained herein, will not be accepted.

Securities may only be offered in the form of a prospectus that meets the requirements of the US Securities Act of 1933, as amended. The transaction and distribution of this document may be restricted by law in certain jurisdictions, and persons in possession of any document or other information referenced herein should inform themselves of and comply with such restrictions. Any failure to comply with these restrictions could constitute a violation of the securities laws of such jurisdiction. Securities are not offered directly or indirectly in or in a legal system in which this would contradict the laws of this legal system.

Additional information and where to find it

In connection with the Transaction, the MDC and New MDC filed a registration statement with the SEC on February 8, 2021, on Form S-4 (the "Form S-4"), as amended March 29, 2021, April 22, 2021, and April 30, 2021, and a proxy statement / prospectus on Form 424B3 dated May 10, 2021, supplemented on July 12, 2021 (the “Proxy Statement” and, together with Form S-4, the “Proxy Statement / Prospectus”) Notice is not a substitute for the Proxy Statement / Prospectus or any other document that MDC may file with the SEC in connection with the Transaction. If available, MDC will use the Proxy Statement / Prospectus in connection with the voting to approve certain matters in the Send to their shareholders in connection with the transaction.

MDC INVESTORS AND SECURITY HOLDERS URGENTLY CAREFULLY REFER TO THE PROXY STATEMENT / PROSPECTUS ABOUT THE TRANSACTION IN ITS ENTIRETY (INCLUDING CHANGES OR ADDITIONS THEREOF) OR ANY INFORMATION ABOUT THE DOCUMENTS REFERRED TO IN THE REQUIREMENTS IN THE TRANSACTIONS . You can obtain free copies of the Proxy Statement / Prospectus and other relevant documents filed with the SEC by the MDC or New MDC on the SEC's website at www.sec.gov. In addition, investors and security holders can obtain free copies of the Proxy Statement / Prospectus and other relevant documents filed by the MDC or New MDC with the SEC and from the MDC website at http://www.mdc-partners.com.

The URLs in this announcement are intended as inactive text references only. They are not intended to be active hyperlinks to websites. The information on such websites, even if it could be accessed via a hyperlink resulting from the URLs or to which reference is made herein, is not and is not considered a part of this announcement. No representation or warranty is made as to the suitability or reliability of any information on these websites for any purpose.

Participant in the tender

MDC, New MDC and their respective directors and officers, as well as other members of management and employees, may be considered participants in the solicitation of proxies by MDC shareholders with respect to the approvals required to complete the Transaction. More detailed information on the identity of these prospective participants and any direct or indirect interests they may have in the transaction, whether through holdings or otherwise, is contained in the proxy statement / prospectus filed with the SEC. Information on MDC's directors and officers is contained in the Definitive Proxy Statement for Schedule 14A filed by MDC with the SEC on May 26, 2020 and in the Annual Report on Form 10-K filed by MDC with the SEC on May 26, 2020 March 16, 2021, as amended April 27, 2021. For more information on attendees' interests in obtaining proxies in relation to the Special Meeting, see the SEC filed Power of Attorney / Prospectus. These documents are available free of charge to MDC shareholders on the SEC's website at www.sec.gov and on the MDC website at www.mdc-partners.com.

You must not interpret the contents of this document as legal, tax, regulatory, financial, accounting or any other advice, and you are urged to consult with your own advisers regarding any legal, tax, regulatory, financial, accounting and other consequences of the transaction , the suitability of the transaction for you and other matters relevant to the transaction.

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