UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 30, 2017

MVC CAPITAL, INC.

(the “Fund”)

(Exact Name of Registrant as Specified in its Charter)

Registrant’s telephone number, including area code:  (914) 701-0310

N/A

 (Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

On May 30, 2017, U.S. Gas & Electric, Inc. (“USG&E”), MVC Capital, Inc. (“MVC”) and James B. Wiser entered into a merger agreement with the Crius Energy Trust (“Crius”), Crius Solar Fulfillment LLC, Verengo, Inc. and Mace Merger Sub., Inc. (the “Merger Agreement”). The Merger Agreement provides for, among other things, the acquisition of USG&E, MVC’s largest portfolio company, by Verengo, Inc., indirectly through the merger of Mace Merger Sub., Inc. with and into USG&E, with USG&E continuing as the surviving corporation (the “Crius Transaction”).

Summary of the Merger Agreement

The Crius Transaction is expected to be completed by July 5, 2017.  Upon the completion of the Crius Transaction, each issued and outstanding share of Mace Merger Sub., Inc. common stock shall, by virtue of the merger and without any action on the part of the holders thereof, be converted into and become one share of Class A Common of the surviving corporation, and each share of USG&E shall be cancelled and the holders of such shares shall instead be entitled to receive the Merger Consideration, as described below.

Expenses.  The Merger Agreement provides that, whether or not the Closing occurs, all expenses incurred by any party to the Merger Agreement in connection with the Merger Agreement and the transactions contemplated by it, will be paid by the party incurring those expenses.

Representations and Warranties. Under the Merger Agreement, the parties have made various representations and warranties.

Covenants.  The Merger Agreement also contains mutual customary pre-closing covenants of the parties thereto, including covenants, among others, of USG&E to conduct its businesses in the ordinary course and in compliance in all material respects with all applicable laws and to refrain from taking certain actions without the other party’s consent.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 and is incorporated by reference into this report.

 

The Merger Agreement has been filed to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about MVC, USG&E, Crius or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger Agreement (a) were made by the parties thereto only for purposes of that agreement and as of specific dates; (b) were made solely for the benefit of the parties to the Merger Agreement; (c) may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement (such disclosures include information that has been included in public disclosures, as well as additional non-public information); (d) may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and (e) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of MVC, USG&E, Crius or any of their respective subsidiaries or affiliates. Additionally, the representations, warranties, covenants, conditions and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in MVC’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding MVC that is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q and other documents that are filed with the Securities and Exchange Commission.

Item 1.02

Termination of a Material Definitive Agreement.

On April 24, 2017 MVC Capital, Inc. (“MVC”) and certain other shareholders of U.S. Gas & Electric, Inc. (“USG&E”) entered into a Stock Purchase and Plan of Merger (“Equus Agreement”) with Equus Total Return, Inc. (“Equus”) and ETR Merger Sub., Inc. (“Merger Sub”), a newly-formed wholly-owned subsidiary of Equus.   Under the terms of the Equus Agreement, USG&E was entitled to terminate the Equus Agreement if it received an unsolicited offer that it deemed superior to the Equus offer (a “Superior Proposal”) after providing Equus with at least three business days’ notice of MVC’s intent to terminate the Equus Agreement.

On May 19, 2017, MVC received an unsolicited offer from Crius Energy, LLC, a subsidiary of Crius Energy Trust (collectively, “Crius”) to acquire 100% of USG&E (the “Crius Offer”).  The Boards of MVC and USG&E determined that the Crius Offer constituted a Superior Proposal under the Equus Agreement and on May 23, 2017 provided notice of such Superior Proposal and of MVC’s and USG&E’s intent to terminate the Equus Agreement to Equus.  On May 30, 2017, MVC and USG&E terminated the Equus Agreement, and in connection with such termination,  USG&E paid to Equus a termination fee of $2,500,000.   A copy of the notice of termination is attached to this Current Report as Exhibit 10.1 and is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Additional Information

Pursuant to the Merger Agreement, in connection with the sale, Crius will file with the Toronto Securities Exchange (“TXS”) a short form prospectus, as well as other relevant documents concerning the Crius Transaction.  INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE DOCUMENTS, INCLUDING THE PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CRIUS, USG&E, THE CRIUS TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the TXS free of charge at the Canadian Securities Administrators website, www.sedar.com.  In addition, additional information regarding the Crius units may be obtained free of charge by accessing Crius’ website at www.criusenergytrust.ca, and documents filed with the SEC by MVC may be obtained free of charge by accessing MVC’s website at www.mvccapital.com.  Shareholders may also read and copy any reports, statements and other information filed by MVC with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such solicitation or sale would be unlawful prior to registration or qualification or exemption under the securities laws of such jurisdiction.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		MVC Capital, Inc.
Date:  June 1, 2017	By:	/s/ Michael Tokarz
		Name: Michael Tokarz
		Title: Chairman

 

INDEX TO EXHIBITS

Exhibits

 

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