An “unsolicited, non-binding proposal” from a Dallas-based LLC led by Tom Lacey and Amir Ansari to acquire all of the outstanding equity of Xperi is being soundly rejected by the company, which includes HD Radio among its assets.
This keeps the wheels in motion on Xperi’s previously announced agreement to merge with TiVo Corporation.
And, it effectively rejects an offer presented some three months after TiVo and Xperi signed off on an all-stock transaction valued by the companies at approximately $3 billion.
The merger agreement between TiVo and Xperi provides for a 0.455 fixed exchange ratio, which implies a 15% premium to TiVo’s shareholders based on each of Xperi’s and TiVo’s 90-day volume-weighted average share prices.
At close, Xperi shareholders will own approximately 46.5% of the combined business, and TiVo shareholders will own approximately 53.5%.
In connection with the transaction each company’s debt will be refinanced on a combined basis. To meet this objective, the companies have secured $1.1 billion of committed financing from Bank of America and Royal Bank of Canada (RBC).
The post-merger company will take the Xperi name, with its CEO, Jon Kirchner, keeping his role — as will Xperi CFO Robert Andersen.
That, in the view of Metis Ventures LLC, wasn’t as sweet as what it had to offer for Xperi, the parent of DTS and IMAX Enhanced brands in addition to HD Radio.
Metis offered to acquire all of the outstanding equity in Xperi Corp. for an all-cash consideration of $23.30 per share. “We believe our proposal presents an extremely attractive outcome for Xperi’s stockholders and offers them liquidity in a manner that is both more certain and timely than the current proposed transaction with TiVo Corporation,” Lacey and Ansari said in a letter to the Xperi board dated Feb. 21.
They say an “immediate drop” in share value for TiVo and Xperi following news of the transaction prompted Metis to offer an unsolicited bid for Xperi.
“It is also an 11% premium to XPER’s stock price on December 18, 2019, the last trading day prior to the announcement of the TiVo Transaction,” Lacey and Ansari assert. They add that they have committed capital at the ready, and believe their proposal is “superior.”
Xperi didn’t bat an eyelash, saying that it is “unable to conclude at this time that Metis Ventures’ non-binding proposal is reasonably likely to lead to a Superior Proposal under the terms of Xperi’s merger agreement with TiVo.”
Therefore, Xperi said, it will not be engaging in discussions with Metis Ventures.
And, it does not intend to make any further comment at this time.
“Xperi reiterates its continued support and enthusiasm for its pending transaction with TiVo and its view that the definitive agreement with TiVo remains in the best interests of Xperi and its stockholders,” it said. “Accordingly, Xperi’s board of directors continues to recommend the merger agreement with TiVo to its stockholders. Xperi’s board of directors is not modifying or withdrawing its recommendation with respect to the TiVo merger agreement and the merger, or proposing to do so.”
