Napster Share Discussion Threads

[david gruen] 02/12/2021 13:47

Mines in the SIPP so no rush for the US listing.

[tomboyb] 02/12/2021 13:44

Best of luck David -

For me I'll see if I can trade here -

Not for the faint hearted -

[david gruen] 02/12/2021 13:39

...but you get a share of an entity with a much higher valuation for your patience.

Some can't hold US stocks. I can :-)

[david gruen] 02/12/2021 13:36

So we have to hold for a while.

[mcfly79] 02/12/2021 13:30

Unusual transaction.

Looks likes shares will be swapped for shares in a newly incorporated, unlisted US entity (expected to occur in Jan next year).

Then they won't be freely tradable until the new entity secures a Nasdaq listing (expected in 2023)

[david gruen] 02/12/2021 13:25

Dropping the price to shaft the forced sellers (US listings).

[david gruen] 02/12/2021 13:23

The US markets will value this at 100 times that of AIM IMHO.

[david gruen] 02/12/2021 13:16

2 December 2021

Napster Group PLC

("Napster", the "Company" or the "Group")

Proposed disposal of the Assets, Share Consolidation, Capital Reduction,

De-Listing and Re-Registration and Notice of General Meeting

The Board of Napster is pleased to announce the proposed disposal of Rhapsody (a subsidiary of the Company containing almost all of the Group's assets and liabilities) to NM Inc for US$45.6 million.

Background to the proposals

Following the acquisition of the Napster business in December 2020, Napster has become more US centric with approximately 42 per cent. of its revenues generated in North America during the rst half of 2021. Its major stakeholders which include rights holders, investors, artists, consumers and a growing employee base are now predominantly concentrated in the US.

As such, the Directors believe that a listing in the US is appropriate for the Napster Business and most bene cial for all stakeholders. Having already considered the opportunity with a number of nancial institutions and with a leading full service US investment bank having been engaged, the Directors also believe that a US listing would provide not only the appropriate access to capital, but a valuation more aligned to the metrics which have been attributed to some of our music competitors and peers and consequently less dilutive to the existing shareholder base.

Once the Proposals have been completed, NM Inc will focus on the launch of the new music service without the regulatory burden of a listing on the LSE whilst also distancing itself from the Company's current public valuation. Furthermore, as a private company, the Directors believe that the Napster business will have greater access to growth capital than it would have if it remained quoted in the UK. It is anticipated that any listing of NM Inc in the US would be completed during 2023 in conjunction with the launch of the new platform and an anticipated period of subscriber growth following an extensive awareness campaign. The Board believes that this should help secure a listing in the US for NM Inc at an enhanced valuation to that of the Company which is ultimately in all Shareholders' interests.

Assuming completion of the Disposal and subject to shareholder approval at the General Meeting, it is proposed that the Company will cancel its admission to trading on AIM of the New Ordinary Shares and re-register as a private company limited by shares as part of a process of collapsing the existing corporate structure. Furthermore, as a result of the Capital Reduction Demerger, the Company will retain certain assets and liabilities, of which the liabilities will be discharged prior to a dissolution of the Company which will be carried out in due course.

NM Inc and the Disposal

NM Inc is a corporation incorporated in the State of Delaware and having its registered office at 251 Little Falls Drive, City of Wilmington, County of New Castle, 19808, United States. The company was incorporated on 12 November 2021 for the purpose of completing the Disposal.

Subject to the Capital Reduction being approved by Shareholders at the General Meeting, on completion of the Disposal, NM Inc will issue Consideration Shares to the holders of New Ordinary Shares so that they will hold one NM Inc Share for every one New Ordinary Share held by them in the Company as at the Disposal Record Time which is expected to be 6.00 p.m. on 27 January 2022. Shareholders on the Register at this time will participate in the Disposal and will receive Consideration Shares. The Disposal is expected to occur at 11.59 p.m. on 27 January 2022.

At this time the Share Purchase Agreement will complete:

(i) the Company will transfer Rhapsody to NM Inc; and
(ii) NM Inc will issue the Consideration Shares to Shareholders on the register at the Disposal Record Time.

NM Inc's directors have the power to issue the Consideration Shares. The Consideration Shares will not be freely tradable and will be restricted until NM Inc lists on Nasdaq, which cannot be guaranteed to occur. It is anticipated that NM Inc will seek to secure a listing on Nasdaq during the rst half of 2023, once appropriate disclosure documents have been prepared and audited nancial statements for NM Inc for the year ended 31 December 2022 have been prepared.

Following a valuation exercise, it has been determined that the fair market value of the invested capital of NM Inc on a pro forma basis is US$46.6 million as at 31 August 2021 on the basis that the Disposal occurred as at that date and the only assets and liabilities within NM Inc are those that form part of the Disposal.

Set out within the Circular are:

-- A pro forma balance sheet (as at 31 August 2021) for the Company showing its expected assets immediately following completion of the Capital Reduction and Disposal; and

-- A pro forma balance sheet (as at 31 August 2021) for NM Inc showing its expected assets immediately following completion of the Disposal.

Issue of Consideration Shares

It is proposed that NM Inc will engage the Transfer Agent to issue the Consideration Shares on NM Inc's behalf upon completion of the Disposal. The Transfer Agent will be provided with the relevant details for each Shareholder by the Registrar. As NM Inc is a US entity, Shareholders will not be able to hold NM Inc Shares in CREST so the issue of the Consideration Shares shall be recorded in book form by the Transfer Agent. No stock certi cates will be issued to Shareholders in respect of the NM Inc Shares. Should a Shareholder wish to receive a stock certi cate in respect of their NM Inc Shares, this can be requested by contacting the Company on the following email address [e-mail].

Share consolidation

As part of the transaction, it is proposed that the Company's existing share capital be re-organised such that:

Every 750 Existing Ordinary Shares be consolidated

into 1 New Ordinary Share of GBP7.50

As all of the Existing Ordinary Shares are proposed to be consolidated, the proportion of issued ordinary shares holdings in the Company held by each Shareholder immediately before and immediately after the Share Consolidation will, save for fractional entitlements (the treatment of which is described below), remain unchanged.

De-Listing

The Directors have for some time been reviewing the merits or otherwise of the Ordinary Shares continuing to be admitted to trading on AIM and remaining a public limited company in the UK. The following key factors have been taken into account by the Directors in reaching the conclusion that, assuming completion of the Disposal, the De-Listing is in the best interests of the Company and its Shareholders as a whole:

-- following completion of the Disposal, there will be negligible assets remaining within the Group which would not justify the costs associated with remaining as a listed business; and

-- as a cash shell, the Directors believe that the Company would not be of suf cient scale to attract any interest from institutional and other investors and would consequently suffer from a lack of liquidity in its Ordinary Shares.

The Directors strongly believe that for the reasons referred to above, should the Disposal be completed, the Company should seek the cancellation of the admission of its Ordinary Shares to trading on AIM and re-register as a private limited company.

In the event that the Disposal is completed and the De-Listing does not occur and, as an AIM Rule 15 cash shell, the Company does not make an acquisition or acquisitions constituting a reverse takeover under the AIM Rules within twelve months of becoming an AIM Rule 15 cash shell, then the Company's New Ordinary Shares would be suspended from trading on AIM.

Notice of General Meeting

The Disposal is of sufficient size relative to that of the Group to constitute a disposal resulting in a fundamental change of business pursuant to Rule 15 of the AIM Rules and Completion is, therefore, conditional upon the approval of Shareholders at a general meeting of the Company. In addition, Shareholder approval is required to effect the share consolidation and the Capital Reduction as well as the proposed De-Listing.

Accordingly, Shareholder approval of the Proposals will be sought at the General Meeting expected to be held at 11.00 a.m. on 20 December 2021. The notice convening the General Meeting and setting out the Resolutions to be considered at it will be set out in a circular which is expected to be posted to Shareholders shortly, extracts of which can be found in the appendix to this announcement.

Irrevocable Undertakings

The Company has received irrevocable undertakings from the Directors and certain other Shareholders to vote in favour of the Resolutions in respect of, in aggregate, 1,357,616,962 Ordinary Shares representing approximately 45.8% of the Company's issued share capital as at the date of this announcement.

Recommendation

The Directors believe that the Proposals are in the best interests of the Company and the Shareholders as a whole. They are therefore unanimously recommending that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting, as they have irrevocably undertaken to do (or procured to be done) in respect of their own beneficial holdings (or shareholdings they control) which, in aggregate, amount to 633,167,326 Ordinary Shares (representing approximately 22.4 per cent. of the current Ordinary Shares in issue).

Commenting on the Proposals, Anthony Matchett, Group CEO, said

"I am delighted by the support we have received from our major shareholders for this proposed transaction in advance of the launch of our new music entertainment platform in February next year. I believe, in particular, that the possibility of a listing of NM Inc in the US will mark the start of an important new chapter in restoring value to our shareholder base. With one of the US West Coast's leading full-service investment banks having been engaged, we are confident in NM Inc's proposed strategy to access near term funding to support the launch of our new platform but ultimately, in its ability to secure a listing in the US at a valuation that is consistent with the metrics of those of our peers."

Capitalised terms in this announcement, unless otherwise defined, have the same meaning as will be set out in the circular to be posted to Shareholders shortly.

For further information please contact:

[king of israel] 29/11/2021 21:08

If you don’t have faith, sell/don’t invest, and move on.

Adios from the King

[michael1mouse] 29/11/2021 21:06

Got to get over 1p. Then back down to 0p. Needs 1p plus for a viable placing then the king can buy some knickers and hide his modesty.

[michael1mouse] 29/11/2021 21:04

Based on what? Is that a finger in the air!

[king of israel] 29/11/2021 20:01

4p first target.

[goforgold1] 29/11/2021 19:49

What for Naps to go bust

[king of israel] 29/11/2021 19:36

Not long to wait now.

[andysand] 29/11/2021 16:02

The problem is that this presentation was last May. It's odd that the company feel their shares are so undervalued and yet they do nothing to keep the market updated or excited about anything, where's the buzz?

[thetempest] 27/11/2021 02:07

I'm all for criticism of Napster but constantly bashing it with 'death spiral finance' is nonsense. N+G haven't sold a bean, from what I can see. They don't need to as the share price is sliding all by itself. There's a reason they're now the biggest shareholders.

That's not to say it's not in dire straits because it is. The app might well be good but as #NAPS don't have any of the assets to 'app' not sure what holders are expecting? Personally, I can see further funding required for 2022 but they'd be mugs to try and fund raise with the share price at this level. I suspect they'll be doing a Starcom and consolidating. The only way the share can continue is with an share price better than 4p. So they might as well consolidate at 20:1 and make it 10p. But then they'll have to place immediately so...

Either way, the share is terrible and will continue to be so until decent news. And it's telling that N+G refuse to convert the remainder of the clns.

[terminator101] 25/11/2021 16:50

Mate, what utter waffle. If you had sold at 4p you could have bought more than 4x the number of shares for the same outlay. Now you need a more than 400% rise in the price just to break even.

[david gruen] 25/11/2021 14:57

"No brainer” = NO BRAIN POWER REQUIRED

Suits you sir!

Just saying!

[terminator101] 25/11/2021 14:56

"No brainer" = NO BRAIN

[david gruen] 25/11/2021 14:45

The finance of which you speak is to fund the takeover of one of the world's most iconic brands. The resulting application is likely to be a game-changer in the industry. A music app that transcends all that have gone before it.

Yes the share price might be supressed at the moment, so not one for the short term trader, but for the SIPP? No brainer for me.