MELVILLE, N.Y. —ChyronHego announced that it has entered into a definitive merger agreement with affiliates of Vector Capital under which an affiliate of Vector will acquire all of the outstanding shares of ChyronHego common stock for $2.82 per share in cash.
A special committee of the ChyronHego board of directors and the disinterested directors of the Board have unanimously approved the Vector agreement and recommend that ChyronHego’s stockholders approve the transaction. The purchase price represents a premium of approximately 18 percent over ChyronHego’s average closing share price for the six months ending on Nov. 14, 2014 and a premium of approximately 230 percent to the closing stock price on March 8, 2013, the day prior to the announcement of the merger between Chyron and Hego.
The price also represents a 4 percent premium over the company’s closing share price on Nov. 14, 2014 after a significant increase in the price in recent months.
“We are pleased to have reached this agreement with Vector, which provides significant value to our stockholders. The disinterested directors of the Board believe that this transaction will provide ChyronHego with the flexibility to innovate and execute our vision for the benefit of all constituencies,” said Roger Ogden, the Chairman of the Special Committee of the ChyronHego Board of Directors.
The transaction is subject to customary closing conditions, including the approval by holders of two-thirds of ChyronHego’s outstanding shares, as well as a non-waivable closing condition requiring the approval by holders of a majority of the shares held by the ChyronHego stockholders who will not become stockholders of the entity resulting from the transaction.
A portion of the shares of ChyronHego common stock beneficially owned by ChyronHego president and CEO, Johan Apel, and other members of the management team, will be exchanged for equity interests of the acquiring entity rather than cash in the merger s they will continue to be equity holders following the transaction.
The company will file a proxy statement with the Securities and Exchange Commission with respect to the Vector transaction, and a shareholder meeting will be held following the SEC’s review. ChyronHego expects the merger to be completed in the first quarter of fiscal 2015.
Under the terms of the agreement, ChyronHego intends to solicit alternative acquisition proposals from third parties during a seven-week “go-shop” period, following the date of execution of the agreement. ChyronHego and its management will be free to accept superior proposals from third parties during this time, subject to the procedural conditions set forth in the agreement. There can be no assurance that this process will result in a superior proposal. The company and the special committee do not intend to disclose developments with respect to the solicitation process unless and until the Special Committee and the Board have made a decision with respect to any potential superior proposal.
Vector has secured committed financing consisting of a combination of equity and debt.
In connection with the execution of the Vector agreement, Apel, the directors and executive officers and certain significant stockholders of the company, who currently own approximately 51 percent of the outstanding shares, have agreed to vote their shares in favor of the merger.
Duff & Phelps, LLC is acting as financial advisor to the special committee of the ChyronHego board, and Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., is acting as ChyronHego’s legal advisor. Shearman & Sterling LLP is acting as Vector’s legal advisor.
In connection with the transaction, ChyronHego will file a proxy statement with the SEC for its special stockholder meeting and stockholders are strongly advised to read the proxy statement when it becomes available because it will contain important information about the proposed transaction. Investors and stockholders may obtain a free copy of the proxy statement (when available) and other documents filed by ChyronHego at the SEC’s website.
ChyronHego and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed transaction.Certain information regarding the interests of such directors and executive officers is included in ChyronHego’s proxy statement for its 2014 Annual Meeting of Stockholders filed with the SEC on April 3, 2014, and information concerning all of the participants in the solicitation will be included in the proxy statement relating to the proposed transaction when it becomes available.
Each of these documents is, or will be, available free of charge at the SEC’s website at http://www.sec.gov and from ChyronHego Corporation, c/o Investor Relations, 5 Hub Drive, Melville, New York 11747, telephone: 631-845-2000.
Trading of ChyronHego shares (CHYR) halted on the NASDAQ yesterday.
At least one class action suit has been filed by shareholders who said the board agreed to insufficient consideration for the broadcast graphics company. Andrews & Springer LLC of Wlimington, Del., has been engaged to represent the participating shareholders.
“While the company claims that shareholders will receive a premium for their shares, this representation is misleading since the company recently traded as high as $2.89 per share—roughly 7 cents higher than the current deal price—as recently as Nov. 7, 2014,” the firm said. “Also, analysts at Yahoo! Finance have set a $4 per share price target for ChyronHego, which is approximately 41.84 percent more than what ChyronHego shareholders are expected to receive.”
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