UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment
No. )*
Primus
Telecommunications Group, Incorporated
(Name of
Issuer)
Common
Stock
(Title of
Class of Securities)
741929301
(CUSIP
Number)
Arbinet
Corporation
460
Herndon Parkway, Suite 150
Herndon,
VA 20170
Attention:
Christie A. Hill, Esq.
(703)
456-4100
(Name,
Address and Telephone Number
of Person
Authorized to Receive Notices
and
Communications)
November
10, 2010
(Date of
Event which Requires Filing of This Statement)
If the
filing person has previously filed a statement on Schedule 13G to report this
acquisition that is the subject of this Schedule 13D, and is filing this
Schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: o
Note: Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See §240.13d-7 for other parties to whom copies are to
be sent.
*The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act.
SCHEDULE
13D
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CUSIP
No.
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741929301
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1
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NAME
OF REPORTING PERSON
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Arbinet
Corporation
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2
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
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(a)
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o
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(b)
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o
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3
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SEC
USE ONLY
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4
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SOURCE
OF FUNDS (SEE INSTRUCTIONS)
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00
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5
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
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o
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6
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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Delaware
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
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7
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SOLE
VOTING POWER
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0
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8
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SHARED
VOTING POWER
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931,295
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9
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SOLE
DISPOSITIVE POWER
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0
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10
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SHARED
DISPOSITIVE POWER
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0
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11
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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931,295
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12
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS)
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o
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13
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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9.6%
(1)
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14
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TYPE
OF REPORTING PERSON
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CO
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(1) The
calculation of this percentage is based on 9,743,157 shares of common stock, par
value $0.001 per share, of Primus Telecommunications Group, Incorporated issued
and outstanding as of November 9, 2010, as represented by Primus
Telecommunications Group, Incorporated in the Merger Agreement described in Item
4 below.
Item
1. Security and Issuer.
This
statement on Schedule 13D (this “Schedule 13D”) relates to shares of common
stock, par value $0.001 per share (“Primus Common Stock”), of Primus
Telecommunications Group, Incorporated, a Delaware corporation (“Primus”), whose
principal executive offices are located at 7901 Jones Branch Drive, Suite 900,
McLean, Virginia 22102.
Item
2. Identity and Background.
(a) —
(c) and (f) The person filing this Schedule 13D is Arbinet
Corporation, a Delaware corporation (“Arbinet”). Arbinet’s principal executive
offices are located at 460 Herndon Parkway, Suite 150, Herndon,
Virginia 20170. Arbinet’s principal business is providing
international voice, data and managed communications services for fixed, mobile
and wholesale carriers.
The name,
business address, present principal occupation or employment (and the name and
principal business of any corporation or other organization in which such
employment is conducted) and citizenship for each director and executive officer
of Arbinet are set forth in Annex I hereto and incorporated herein by
reference.
(d) —
(e) During the last five years, neither Arbinet nor, to the knowledge of
Arbinet, any of the persons listed on Annex I attached hereto has (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of any judicial or
administrative body that resulted in a judgment, decree or final order enjoining
any of them from future violations of, or prohibiting or mandating activities
subject to, U.S. federal or state securities laws, or a finding of any violation
of U.S. federal or state securities laws.
Item
3. Source and Amount of Funds or Other Consideration.
As more
fully described in response to Item 4, the shares of Primus Common Stock to
which this Schedule 13D relates have not been purchased by Arbinet. As an
inducement to Arbinet entering into the Merger Agreement described in
Item 4, and in consideration thereof, the Committed Stockholder (as defined
in Item 4) entered into the Voting Agreement (as defined in Item 4), pursuant to
which the Committed Stockholder has agreed, among other things, to vote the
shares of Primus Common Stock that are subject to the Voting Agreement in favor
of the adoption of the Merger Agreement and the transactions contemplated by the
Merger Agreement, at any meeting of the stockholders of Primus, on the terms and
subject to the conditions set forth in the Voting Agreement. Arbinet has not
paid additional consideration to the Committed Stockholder in connection with
the execution and delivery of the Voting Agreement. For a description of the
Voting Agreement, see Item 4 below, which description is incorporated
herein by reference. Any beneficial ownership of Arbinet in Primus that may be
deemed to arise from the Voting Agreement is not expected to require the
expenditure of any funds. See Item 4 for a description of the Merger
Agreement and the merger consideration to be paid thereunder.
References
to, and descriptions of, the Merger Agreement and the Voting Agreement as set
forth herein are not intended to be complete and are qualified in their entirety
by reference to the Merger Agreement and the Voting Agreement, respectively,
copies of which are filed as Exhibit A and Exhibit B, respectively, to this
Schedule 13D and are incorporated by reference in this Item 3 in their
entirety.
Item
4. Purpose of the Transaction.
On November 10, 2010, Arbinet, Primus
and PTG Investments, Inc., a direct wholly owned subsidiary of Primus (“Merger
Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”),
the purpose of which is for Primus to acquire control of the entire equity
interest in Arbinet. The Merger Agreement provides that, upon the terms and
subject to the conditions set forth in the Merger Agreement, Merger Sub will
merge with and into Arbinet with Arbinet continuing as the surviving corporation
and a wholly-owned subsidiary of Primus (the “Merger”). Concurrently
with the execution of the Merger Agreement, Arbinet entered into a Stockholder
Support and Voting Agreement (the “Voting Agreement”) with Singer Children’s
Management Trust, a significant stockholder of Primus Common Stock (the
“Committed Stockholder”). The purpose of the Voting Agreement is to
facilitate the transactions contemplated by the Merger Agreement.
Consummation of the Merger is subject
to certain conditions, including without limitation: (i) the adoption of the
Merger Agreement by the stockholders of Arbinet and the approval of the issuance
of shares of Primus common stock in the Merger by the stockholders of Primus;
(ii) the absence of any governmental order or other legal restraint prohibiting,
preventing or otherwise enjoining the consummation of the Merger; (iii) the
effectiveness of the registration statement for the common stock of Primus being
issued in the Merger and the absence of any stop order or proceeding seeking a
stop order with respect to such registration statement or the joint proxy
statement/prospectus; (iv) subject to some exceptions, the receipt of any
required approvals or authorizations of the Merger from applicable governmental
authorities, including the U.S. Federal Communications Commission; (v) subject
to certain exceptions, the accuracy of the representations and warranties and
the performance of covenants; and (vi) the delivery of customary opinions from
counsel to Primus and counsel to Arbinet that the Merger will qualify as a
tax-free reorganization for federal income tax purposes, provided the permitted
sale or spin-off of Arbinet’s patents and associated rights would not render it
impossible for counsel to provide such opinions. In addition, the
obligations of Primus and Merger Sub are subject to the number of appraisal
shares not exceeding 10% of the outstanding shares of Arbinet common stock and
Arbinet having taken actions under its 2004 Stock Incentive Plan, as amended, to
cancel certain Arbinet stock options and stock appreciation
rights. Primus’ obligation to complete the Merger is also conditioned
on there not having occurred a material adverse effect with respect to Arbinet,
which includes without limitation not having at least a specified amount of
cash.
At the effective time of the Merger,
subject to the other provisions of the Merger Agreement, each share of Arbinet
common stock (excluding certain shares) shall be converted into the right to
receive the number of Primus common stock equal to the exchange
ratio. The Merger Agreement provides that the exchange ratio is equal
to the quotient of (x) the quotient of (A) $28,000,000 (the “Transaction
Amount”), subject to certain potential upward adjustments, divided by (B) the
number of shares of Arbinet common stock issued and outstanding immediately
prior to the effective time of the Merger plus those shares that may become
issuable as Primus common stock at or after the effective time of the Merger
pursuant to the provisions of the Merger Agreement that address the treatment of
Arbinet equity awards, divided by (y) $9.5464, and rounded to the nearest
ten-thousandth. Equity awards for Arbinet common stock outstanding as
of the effective time shall be assumed by Primus and converted into an equity
award for Primus common stock, after being adjusted by the exchange
ratio.
The Merger Agreement contains a
“go-shop” provision under which Arbinet may solicit alternative proposals from
third parties during the 45 calendar days beginning on November 10, 2010 and
ending at 11:59 p.m, Eastern time, on December 25, 2010. During the go-shop
period, Arbinet and its representatives may initiate, solicit and/or encourage
alternative acquisition proposals from third parties, provide non-public
information and participate in discussions and negotiate with third parties with
respect to alternative acquisition proposals. Upon the expiration of
the go-shop period, Arbinet will be prohibited from soliciting alternative
acquisition proposals from third parties and/or providing information to or
engaging in discussions with third parties regarding alternative acquisition
proposals. The no-shop restrictions, however, are subject to customary
“fiduciary-out” provisions which allow Arbinet under certain circumstances,
prior to the time that Arbinet receives approval of the Merger from its
stockholders, to (i) provide information to, and participate in discussions
with, third parties with respect to unsolicited alternative acquisition
proposals that the Board of Directors of Arbinet has determined would or could
reasonably be expected to, if consummated, result in a transaction more
favorable to Arbinet’s stockholders, and that not taking such action would be
inconsistent with its fiduciary duties and (ii) change the Board of Directors’
recommendation to approve the Merger (an “Arbinet Recommendation
Change”) in connection with such acquisition proposal or as a result
of an unforeseeable intervening event if not changing its recommendation would
be inconsistent with its fiduciary duties.
Arbinet and Primus made customary
representations, warranties and covenants in the Merger Agreement, including,
among others, covenants to conduct its businesses in the ordinary course between
the execution and delivery of the Merger Agreement and the consummation of the
Merger and not to engage in certain kinds of transactions or take certain
actions during such period. Notwithstanding the foregoing, the Merger Agreement
permits specific actions to be taken between signing of the Merger Agreement and
the closing of the Merger.
The Merger Agreement contains certain
termination rights for both Arbinet and Primus. Upon termination of the Merger
Agreement in the event of an Arbinet Recommendation Change due to a
superior proposal, Arbinet is obligated to pay Primus break-up fees of
$1,250,000. In addition, if the Merger Agreement is terminated by either party
due to Arbinet’s stockholders’ rejection of the Merger, or by Primus due to
Arbinet’s breach, and Arbinet enters into another acquisition agreement within
18 months of such termination, Arbinet is obligated to pay Primus break-up fees
of $1,250,000. If the Merger Agreement is terminated due to Arbinet’s
stockholders’ rejection of the Merger, or due to Arbinet’s breach, then Arbinet
is obligated to reimburse Primus’s expenses up to $750,000, in addition to
break-up fees, if applicable. If the Merger Agreement is terminated due to
Primus’s breach, then Primus is obligated to reimburse Arbinet’s expenses up to
$750,000.
The
directors of Merger Sub immediately prior to the effective time of the Merger
will be the directors of the surviving corporation in the Merger, each to hold
office in accordance with the surviving corporation’s certificate of
incorporation and bylaws. The officers of Arbinet in office immediately prior to
the effective time of the Merger will be the officers of the surviving
corporation in the Merger until their respective successors have been duly
elected or appointed and qualified, in accordance with the surviving
corporation’s certificate of incorporation and bylaws.
Under the
Voting Agreement, the Committed Stockholder has agreed, among other things, to
vote the shares of Primus Common Stock held by the Committed Stockholder that
are subject to the Voting Agreement: (i) in favor of the transactions
contemplated by the Merger Agreement, including the issuance of shares of Primus
common stock in the Merger, and any other action reasonably requested by Arbinet
in furtherance thereof, submitted for the vote or written consent of
stockholders of Primus; (ii) against any action or agreement that would result
in a breach of any covenant, representation or warranty or any other obligation
or agreement of Primus or any of its subsidiaries contained in the Merger
Agreement; and (iii) against any action, agreement or transaction that would
impede, interfere with, delay, postpone, discourage, frustrate the purposes of
or adversely affect the Merger or the other transactions contemplated by the
Merger Agreement. In addition, the Committed Stockholder also granted
Arbinet an irrevocable proxy to vote the shares of Primus Common Stock that are
subject to the Voting Agreement in accordance with the preceding sentence. The
shares of Primus Common Stock that are subject to the Voting Agreement represent
approximately 931,295 shares, or 9.6%, of the Primus Common Stock outstanding as
of November 9, 2010.
The
Voting Agreement provides that the Committed Stockholder will not sell or
otherwise transfer the shares of Primus Common Stock that are subject to the
Voting Agreement, or participate in any efforts to solicit alternative
acquisition proposals with respect to Arbinet. The Voting Agreement also
provides that the Committed Stockholder will not exercise any rights of dissent
or appraisal pursuant to Section 262 of the Delaware General Corporation Law to
the extent the Committed Stockholder is entitled to such rights. The
Voting Agreement will terminate upon the earliest to occur of (a) the effective
time of the Merger, (b) the termination of the Merger Agreement in accordance
with its terms and (c) the written agreement of the Committed Stockholder and
Arbinet to terminate the Voting Agreement.
Concurrently
with the execution of the Voting Agreement, the Committed Stockholder entered
into a substantially similar Stockholder Support and Voting Agreement with
Primus with respect to the Committed Stockholder’s shares of Arbinet common
stock, representing approximately 1,276,110 shares, or 23.2% of the Arbinet
common stock outstanding as of November 9, 2010.
Investors
are not third-party beneficiaries under the Merger Agreement or the Voting
Agreement and should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual state of facts or
condition of Primus, Merger Sub or Arbinet or any of their respective
subsidiaries or affiliates.
Other
than as described in this Item 4, Arbinet has no present plans or proposals
that would relate to or result in any of the matters listed in paragraphs
(a) through (j) of Item 4 of Schedule 13D (although Arbinet
reserves the right to formulate specific plans and proposals with respect to, or
change its intentions regarding, any or all of the foregoing, subject to the
terms of the Merger Agreement and the Voting Agreement).
The
information set forth, or incorporated by reference, in Items 3, 5 and 6 of this
Schedule 13D is hereby incorporated by this reference in this
Item 4.
References
to, and descriptions of, the Merger Agreement and the Voting Agreement as set
forth herein are not intended to be complete and are qualified in their entirety
by reference to the Merger Agreement and the Voting Agreement, copies of which
are filed as Exhibit A and Exhibit B, respectively, to this
Schedule 13D and are incorporated by reference in this Item 4 in their
entirety.
Item
5. Interest in Securities of the Issuer.
(a) —
(b) For the purpose of Rule 13d-3 under the Exchange Act, Arbinet, by
reason of the execution and delivery of the Voting Agreement, may be deemed to
have shared voting power with the Committed Stockholder with respect to (and
therefore beneficially own within the meaning of Rule 13d-3 under the
Exchange Act) an aggregate of 931,295 shares of Primus Common Stock,
representing approximately 9.6% of the Primus Common Stock, based on 9,743,157
issued and outstanding shares of Primus Common Stock as of November 9, 2010, as
represented by Primus in the Merger Agreement. With respect to the
voting of such 931,295 shares of Primus Common Stock, Arbinet (or its designee)
has the power to vote or direct the voting of the shares in accordance with the
terms of the Voting Agreement.
Except as
set forth in this Item 5, neither Arbinet nor, to the knowledge of Arbinet,
any of the persons listed on Annex I attached hereto beneficially owns or has
the power to vote or cause the vote of any shares of Primus Common
Stock.
Neither
the filing of this Schedule 13D nor any of its contents shall be deemed to
constitute an admission that Arbinet is the beneficial owner of the shares of
Primus Common Stock subject to the Voting Agreement for purposes of Section
13(d) of the Exchange Act or for any other purpose, and such beneficial
ownership is expressly disclaimed.
(c) Except
for the execution and delivery of the Voting Agreement and the Merger Agreement,
no transactions in shares of Primus Common Stock were effected by Arbinet or, to
the knowledge of Arbinet, any of the persons listed on Annex I attached hereto
during the 60 days prior to the date hereof.
(d) —
(e) Not applicable.
Item
6. Contracts, Arrangements; Understandings or Relationships with Respect to
Securities of the Issuer
The
information set forth, or incorporated by reference, in Items 3 through 5 of
this Schedule 13D is hereby incorporated by reference in this Item 6.
Except as otherwise described in this Schedule 13D, to the knowledge of
Arbinet, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 above, and between
any such persons and any other person, with respect to any securities of
Primus.
Item
7. Material
to be Filed as Exhibits.
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Exhibit
A
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Agreement
and Plan of Merger, dated as of November 10, 2010, among Primus
Telecommunications Group, Incorporated, PTG Investments, Inc. and Arbinet
Corporation (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K filed by Arbinet Corporation on November 12,
2010).
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Exhibit
B
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Stockholder
Support and Voting Agreement, dated as of November 10, 2010, between
Arbinet Corporation and Singer Children’s Management Trust (incorporated
by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by
Arbinet Corporation on November 12,
2010).
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SIGNATURES
After
reasonable inquiry and to the best of the undersigned’s knowledge and belief,
the undersigned hereby certifies that the information set forth in this
statement is true, complete and correct.
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Dated:
November 22, 2010
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Arbinet
Corporation
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By:
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/s/ Christie A. Hill
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Christie
A. Hill
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General
Counsel, Secretary and Chief Human Resources Officer
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ANNEX
I
The
following tables set forth the name, present principal occupation or employment
(and the name and principal business of any corporation or other organization in
which such employment is conducted) for each of the executive officers and
directors of Arbinet. The business address for each of the persons
listed below is c/o Arbinet Corporation, 460 Herndon Parkway, Suite 150,
Herndon, Virginia 20170. Each of the persons listed below
is a U.S. citizen. None of the persons listed below beneficially own
any shares of Primus Common Stock.
Executive
Officers of Arbinet Corporation
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Name
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Principal
Occupation/Employment
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Shawn
F. O’Donnell
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Chief
Executive Officer, President and Director, Arbinet
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Gary
G. Brandt
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Chief
Financial Officer, Arbinet
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Christie
A. Hill
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General
Counsel, Secretary and Chief Human Resources Officer,
Arbinet
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Directors
of Arbinet Corporation
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Name
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Principal
Occupation/Employment
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Shawn
F. O’Donnell
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Chief
Executive Officer, President and Director, Arbinet
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Jose
A. Cecin, Jr.
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Chairman
of Board of Arbinet and President, Lumina Advisors1/
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Randall
Kaplan
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President and Chief Executive
Officer, PBK Management Company, Inc.2/
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Stanley
C. Kreitman
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Chairman, Manhattan Associates,
LLC3/
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John
B. Penney
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Executive Vice President,
Strategy & Business Development, Starz, LLC4/
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Robert
M. Pons
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Senior Vice President of Capital
Markets, TMNG Global5/
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David
C. Reymann
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Chief Financial Officer, Drop
Test International, LLC6/
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1/A
strategy, operations and corporate development advisory
company.
2/An
investment firm specializing in real estate, private equity, hedge funds and
venture capital.
3/An
investment banking company.
4/A public
media company and a controlled subsidiary of Liberty Media
Corporation.
5/A
provider of strategy, management and technical consulting services to the global
telecommunications industry.
6/A risk
management solutions company.