The reverse cannibalization statement has been issued by Phillips, who says he is not optimistic that a takeover will be finalized. He says the statement has been issued "because of the existing confusion and speculation in the marketplace regarding the future of FirstPlus."
Nineteenth Investment is primarily a real estate acquisition and finance company. The negotiations center on a tax-free stock-for-stock transaction that would place Nineteenth stockholders in control of the home mortgage lender and substantially dilute FirstPlus shareholders' interests, according to Phillips' statement.
"FirstPlus believes that there is significant likelihood that the issues may not be resolved and that the transaction will not move forward," says Phillips. "In which case, the liquidation of FirstPlus may be necessary."
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