Rhythmone Share Discussion Threads

[1gw] 13/9/2017 20:47

Indeed, but $5.5m is fairly small in the context of a $185m acquisition. So if the R1 deal really is just a stalking horse then any other interested parties have to offer $190m or so to cover the termination fee as well as beat the R1 offer. And that's if the R1 offer is valued at 37.5p. If it is valued at the current R1 share price then the amount they would need to offer to get YuMe's attention might be rather less.

I don't think R1 would be happy walking away with $5.5m somehow.

As I said before, low probability I think, but not impossible.

[lance corporal winstanley ash] 13/9/2017 20:43

5,5m if 1r get gazumped

[geheimnis2] 13/9/2017 20:41

Yep - very bullish stocky

Thanks for the insight!

[stocky] 13/9/2017 20:36

Oh! So if either company cannot get shareholder approval, then they will pay out $0.5m.

[geheimnis2] 13/9/2017 20:35

No surprise to see born loser kenny boy/quimmer still ranting and raving here

Lol!

[1gw] 13/9/2017 20:32

Not really LCWA.

As I read it, if either side just votes against the deal then it's only expenses payable (up to $0.5m) and it's reciprocal (i.e. same deal if R1 votes against it). The bigger termination fee only comes into play where YuMe gets and wants to accept a higher offer, or, as I interpret it where they show "bad faith" e.g. by withdrawing their recommendation or going out and actively seeking a higher offer.

Remember they've just run a strategic process where presumably anyone who was vaguely credible and serious as a potential purchaser got full access to a dataroom. So there's no need to make additional data available to any potential counter-bidders - those companies should already have all the data they need to make a higher offer if they are really interested.

[lance corporal winstanley ash] 13/9/2017 20:22

Got them by the balls gw

[1gw] 13/9/2017 20:13

Worked out how to paste it.

This is from page 3 of the 5th September 8-K filing on the YuMe SEC filings page.


"The Merger Agreement includes customary termination provisions for both RhythmOne and YuMe, and provides that, in connection with the termination of the Merger Agreement under specified circumstances, including a termination by YuMe to accept a superior proposal and enter into a definitive agreement providing for such superior proposal, or a termination by Parent in the event YuMe’s Board withdraws its recommendation, recommends an alternative transaction or in the event YuMe materially breaches its non-solicitation obligations, YuMe will pay RhythmOne a termination fee of $5,536,790. Additionally, if the minimum tender condition set forth in the Merger Agreement cannot be met by March 31, 2018 (which may be extended to April 30, 2018) and the Merger Agreement terminates in accordance with its terms, YuMe will pay RhythmOne for their reasonable expenses in connection with the Merger Agreement up to $500,000. If RhythmOne is unable to get shareholder approval by March 31, 2018 and the Merger Agreement terminates in accordance with its terms, RhythmOne will pay YuMe for their reasonable expenses in connection with the Merger Agreement up to $500,000.

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 with this report as Exhibit 2.1."

[sikhthetech] 13/9/2017 20:10

Lack of clarity on 1R's finances...Lack of clarity on how perk and Rad1 are doing..Now lack of clarity on whether the yume deal will complete or not...

[stocky] 13/9/2017 19:45

If YuMe voted against the deal, the below still applies?"The Agreement contains provisions whereby a termination fee of US$5,536,790 (equating to approximately 3% of the of the transaction value) would be payable by YuMe to the Company if the Agreement is terminated under certain circumstances."

[barkboo] 13/9/2017 17:30

Strange post Loaf - surely you know how markets work....why be surprised when the obvious fails to happen?

How do markets and Bookmakers make money...not by the obvious my friend. Even thicko's like Gowlane or Kenny would have it off.

Btw - they are both skint!......Calm down my friends.

[football] 13/9/2017 16:54

Says the prop trader still picking up your wage from winterfloods?

[leluot3] 13/9/2017 16:13

30p on the way

RIP Barkpoooo!!

240p!!!!!!!!!

Thanks for popping in Digi

[1gw] 13/9/2017 14:37

LCWA - I think it unlikely but not impossible that R1 is either gazumped or just persuaded to up its offer. The market is pricing YuMe shares at a discount to the theoretical price of the R1 acquisition (hence the arbitrage opportunity) and so doesn't appear to think there's much chance of a counterbid.

But, as far as I can see, while VIEX and AVI signed tender & support agreements, Edenbrook Capital didn't. Edenbrook Capital only owns 5% or so (as of 31st March) but was the activist who, according to the blog linked below, objected to an earlier offer by AVI for YuMe. YuMe had apparently offered $4.52-$5.22 per share for YuMe and Edenbrook "filed a 13-D saying they thought the offer dramatically undervalued YuMe and that the company was worth at least $7.15/share in a deal." according to the blog.

Clearly time (and the special dividend) has passed since then and YuMe has perhaps it would appear "run a full and fair process to surface other potential buyers" as requested by Edenbrook, but maybe Edenbrook still holds the key as to whether this goes through without significant challenge.

Blog:


Edenbrook challenge to AVI offer:

[lance corporal winstanley ash] 13/9/2017 13:19

I have voted for for all the motions at the upcoming meeting. Do we know if Brian will be there?

[lance corporal winstanley ash] 13/9/2017 13:17

1gw. Do you think 1r might get gazumped?

[lance corporal winstanley ash] 13/9/2017 13:16

Most welcome.

[wheeze] 13/9/2017 13:13

Thanks 1gw and LCWA.

[gowlane] 13/9/2017 13:08

The Night Watchman from this Hotel California of stocks is back!

Desperate to get passers-by to check in and stop any punters already in from leaving.

Well done on evading the chop yet again Barky.

[gowlane] 13/9/2017 13:03

I bet they had a stinker in Q1. Hence no trading news but a frenzy in deal making and management changes.

These guys are very clever in the way they release information, staying just on the right side of the red line in legal terms.

So they claimed 'market consensus' was for $15m ebitda in FY18, but don't say where this came from. Lol!

There is no chance they will list on Nasdaq. The US legal, investment and regulatory community would eat them alive.