Half of the board of Dallas-based RMG Networks resigned earlier this month in the wake of decisions surrounding proposals to acquire the software and solutions company.
This comes in the wake of the company’s board chair doing a merger agreement to take the public company private, and then a “go-shop” period that allowed for and “elicited an alternative acquisition proposal from a third party to engage in a recapitalization transaction with the company.”
The vote to accept the deal did not pass (though if you read the stuff below it kinda seems like it did … ), so three guys resigned.
This stuff is way over my head, so here ar the latest plot turns, as laid out in a press release:
RMG Networks Holding Corporation (the “Company”) (NASDAQ: RMGN) today announced that the special committee of the board of directors of the Company (the “Special Committee”) and the board of directors of the Company (the “Board”) each held a meeting on August 1, 2018 to consider the previously announced alternative acquisition proposal from a third party, Hale Capital Partners, Inc.(“Hale”), to engage in a recapitalization transaction with the Company which was received by the Company during the “go-shop” period provided for in the existing merger agreement (the “Merger Agreement”) between the Company and entities owned by Mr. Gregory Sachs, the company’s executive chairman, and modified after negotiations between the Special Committee, in consultation with its financial advisors and legal counsel, and Hale (as so modified, the “Hale Transaction”).
In the meeting held by the Special Committee, the Special Committee unanimously determined that the Hale Transaction would result in a transaction more favorable to the Company’s stockholders than the Merger Agreement and the transactions contemplated by the Merger Agreement and recommended to the Board that the Board, among other things, declare the Hale Transaction to be a “Superior Proposal” (as defined in the Merger Agreement).
Immediately following the Special Committee meeting, the Board held a meeting attended by each of the six members of the Board. At that meeting, the Board considered whether to declare the Hale Transaction to be a “Superior Proposal” (as defined in the Merger Agreement). After discussion, each member of the Special Committee, Mr. Jeffrey Hayzlett, Mr. Alan Swimmer, and Mr. Jonathan Trutter, voted in favor of the matter, Mr. Robert Michelson and Mr. Larry Weber voted against the matter, and Mr. Gregory Sachs abstained from voting. The Company’s bylaws provide that, with certain exceptions not applicable to this matter, approval of a matter requires the affirmative vote of a majority of the directors present at any meeting of the Board at which there is a quorum. As a result, the matter did not pass.
On August 2, 2018, each of Mr. Jeffrey Hayzlett, Mr. Alan Swimmer, and Mr. Jonathan Trutter resigned as a member of the Board effective August 2, 2018.
If you are a securities lawyer with way too much time on your hands, you can read the various SEC filings here …
As I understand it, it’s business as usual around RMG as this plays out.