Kudelski Walks Away… Sort Of
But Kudelski isn't simply taking its toys and going home. Instead, it plans to apply plenty of pressure through its board representation at OpenTV to "mitigate the risks" that Kudelski believes the set-top software specialist will be faced with if it continues to go it alone. One strategy it's strongly advocating: spend, spend, spend on next-gen technologies and platforms.
On Wednesday, OpenTV formally rejected Kudelski's takeover offer, labeling it "inadequate and not in the best interests of the Company and its stockholders." At last check, Kudelski held 77.2 percent of the voting interest OpenTV, and a 32.3 percent economic stake. (See OpenTV Rejects Kudelski Bid and Kudelski Wants Its OpenTV .)
In comments issued early this morning, Kudelski said the OpenTV Special Committee assigned to review the bid has it all wrong, and believes that its proposal would "deliver superior value" to OpenTV shareholders.
Kudelski further argued that the committee is overly optimistic on the future of OpenTV's businesses and has underestimated the firm's strategic challenges that, if not addressed, "will materially affect its revenues and margins."
That, in turn, has left Kudelski believing that "the long-term viability of OpenTV’s business as a stand-alone entity is seriously in doubt."
So, short of a new bid, Kudelski said it will advocate through its board position that OpenTV spend on next-gen systems, "mainly organically but also potentially through acquisitions."
Kudelski acknowledged that such a strategy could sap OpenTV's cash reserves and depress the company's financial performance for a few years, but believes it's the only one that will keep OpenTV viable for the long haul.
At the end of the first quarter, OpenTV reported having $114.2 million in cash, cash equivalents, and marketable debt securities. OpenTV shares closed Tuesday at $1.72 apiece, down 10 cents for the day.
— Jeff Baumgartner, Site Editor, Cable Digital News