UTR, LLC, owners of more than two percent of the outstanding shares of Outdoor Channel Holdings, Inc., sent a letter Tuesday to the companys board of directors calling for them to immediately cease any additional steps regarding OUTD’s proposed merger with InterMedia Outdoor Holdings, LLC.
UTR believes the Companys Board:
- Ran an inefficient process,
- Accepted inadequate consideration,
- Failed to protect outside shareholders against the interests of sizable insider shareholders, and
- Saddled shareholders with an illiquid stub equity.
We believe the current merger agreement is not in the best interest of shareholders and fails to realize the full potential of the Companys true intrinsic value, said Andrew Franklin, President, UTR. Furthermore, the unattractive consideration accepted by the Board of Directors is the direct result of its failure to exercise its fiduciary obligations to all shareholders, not just insiders.
Franklin concluded: We question why the Special Committee of disinterested directors convened by the Board and tasked with reviewing and evaluating the strategic options available to the Company appears to have been disbanded and never formally reconvened during the period when the latest round of acquisition proposals was run.
As a result, UTR requests the Board:
- Immediately cease any additional steps towards completion of the merger at this time;
- Retain an independent financial advisory firm to offer a fairness opinion to determine the true value of the Company, and that these findings be made available to the public; and
- Run an open bid process, led by the Companys Special Committee of disinterested directors, that markets the Company to a broad selection of potential qualified buyers.
The full text of the letter can be viewed here.
