13D Filing: Elliott Associates, L.P. and Affinion Group Holdings Inc. (AFGR)

The following constitutes Amendment No.2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”). This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.

ITEM 5.

Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated as follows:

The aggregate percentage of Common Stock reported owned by each person named herein is based upon 11,225,166 shares of Common Stock outstanding, based on the 9,093,330 shares of Common Stock outstanding as of July 26, 2017 as reported by the Issuer in its quarterly report on Form 10-Q filed with the Securities and Exchange Commission on July 27, 2017 and 2,131,836 shares of Common Stock issuable upon exercise of the Warrants.

As of the date hereof, Elliott beneficially owned 818,187 shares of Common Stock, including 682,187 shares of Common Stock issuable upon exercise of the Warrants, constituting approximately 7.3% of the shares of Common Stock outstanding.

As of the date hereof, Elliott International beneficially owned 1,738,649 shares of Common Stock, including 1,449,649 shares of Common Stock issuable upon exercise of the Warrants, constituting approximately 15.5% of the shares of Common Stock outstanding. EICA, as the investment manager of Elliott International may be deemed to beneficially own the 1,738,649 shares of Common Stock beneficially owned by Elliott International, constituting approximately 15.5% of the shares of Common Stock outstanding.

Collectively, Elliott, Elliott International and EICA beneficially own 2,556,836 shares of Common Stock, including 2,131,836 shares of Common Stock issuable upon exercise of the Warrants, constituting approximately 22.8% of the shares of Common Stock outstanding.

The shares beneficially owned by the Reporting Persons represent less than 17.2% of the shares of Affinion Group on a fully diluted basis.

ITEM 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

Item 6 is hereby amended and restated as follows:

Pursuant to the Investor Purchase Agreement, on May 10, 2017, the Reporting Persons acquired Warrants (the “Warrants”) to acquire up to 2,131,836 shares of Common Stock at an exercise price equal to $0.01.  However, the Reporting Persons are prevented from exercising the Warrants to the extent that after giving effect to such exercise, the Reporting Persons would beneficially own in excess of 17.2% of the shares of Affinion Group on a fully diluted basis without the consent of the North Dakota Insurance Commissioner.

In connection with the Investor Purchase Agreement, on May 10, 2017, the Issuer entered into a Warrant Agreement with American Stock Transfer & Trust Company, LLC, as warrant agent (the “Warrant Agreement”), setting forth the terms of the New Warrants. Pursuant to the terms of the Warrant Agreement, the New Warrants are immediately exercisable upon issuance and will terminate on the earlier to occur of (i) November 10, 2022 and (ii) five business days following the consummation of a sale of Affinion Holdings or other similar fundamental transaction. Each New Warrant is exercisable for one share of Common Stock at a price equal to $0.01.  The Warrants contain customary provisions for the adjustment of the number of shares of Common Stock issuable upon exercise in the event of the occurrence of any organic dilutive (or anti-dilutive) events, including, but not limited to, splits, combinations, stock dividends and similar transactions, as well as in the event of dividends or distributions in respect of Common Stock to the extent that holders of Warrants are not permitted to participate on an as-exercised basis.