OpenTV Rejects Kudelski Bid
Swiss firm Kudelski made an offer on February 27 to buy the outstanding Class A ordinary shares it doesn't already own for $1.35 each. If the offer had been accepted, it would have cost Kudelski, which specializes in content security systems and IPTV middleware, $127 million to buy out the other Class A shareholders. (See Kudelski Wants Its OpenTV .)
According to documents filed with the Securities and Exchange Commission (SEC) , at the end of March this year Kudelski held all of OpenTV's Class B shares and 13.4 percent of its Class A shares, giving it 77.2 percent of the voting interest in the set-top box middleware and interactive advertising system software company, and a 32.3 percent economic stake.
Other major Class A shareholders (as of the end of March) included Chicago-based Discovery Equity Partners LP (11.4 percent of Class A stock) and Sun Microsystems Inc. , with a 7 percent holding.
But a special committee of board members, set up in early March by OpenTV to examine the bid, has rejected the offer "after careful consideration, including a thorough review of OpenTV’s business and prospects, and other factors." (See OpenTV Committee to Review Takeover Bid.)
When Kudelski made its move, OpenTV's stock was worth $1.00 on the Nasdaq. News of the offer bumped up OpenTV's share price to $1.18 by the close of trading on February 27.
Since then, though, OpenTV's share price has risen steadily, and it closed Tuesday at $1.74.
In early May, OpenTV reported first-quarter results that, while worse than a year earlier, showed some resilience to the global economic downturn: Revenues dipped 13 percent to $29.4 million, but the company still managed to report a net profit and boosted its cash position. CEO Ben Bennett noted that the company remained "cautiously optimistic for the digital television industry as a whole" for 2009.
OpenTV also announced plans to develop its advertising campaign management system, EclipsePlus, for the international market, and revealed Time Warner Cable Inc. (NYSE: TWC) as a new customer for that platform. (See OpenTV Takes Interactive Ad System Global and TWC, OpenTV Strike Advanced Ad Deal.)
So, will Kudelski increase its bid?
As news of OpenTV's rejection was only issued overnight, Kudelski can't comment while the Swiss and New York stock exchanges are still open today, says a spokesman. The company plans to issue a statement tonight once the markets have closed, he notes.
Kudelski's share price edged up by 0.8 percent to 17.39 Swiss Francs ($16.29) on the Six Swiss exchange Wednesday morning.
— Ray Le Maistre, International News Editor, Light Reading