Shareholders Challenge Jay Z’s “Bad” Bid For Aspiro Streaming Music Services
More than 120 shareholders in Aspiro have joined together to challenge Jay Z's $56 million bid to acquire the company's two streaming music services WiMP and high definition music channel Tidal.
A group of 120 Aspiro shareholders are banning together to challenge Jay Z's $56 million bid to buy streaming music services WiMP and Tidal. "A consistent view of all registered shareholders is that they believe that the bid is bad and not sufficiently value the company's potential," the shareholders said in a statement that continued:
"Shareholders in the minority has loyally contributed to the financing of Aspiro up to today's level. The offer provides no premium for this, which feels very unsatisfactory"
The shareholders point out that the company made "extensive investments and launches conducted during the fall of 2014 in 5 countries including USA and England. In addition launches are planned in a further 20 countries in Q1 2015." The purchase also includes $63.5 million as of December 31, 2014)and significant value of tax loss, which was not reported, according to the shareholders.
So far the group represents 10% of shareholders, which is likely slow the purchase and could force Jay Z to up his offer. Both sides may want to move quickly, however, records show that Aspiro is burning through cash.
Ha-ha, Google Translator of http://www.aspiro.pm I’m guessing? Give me a shout next time you need help with Swedish.
63 million CROWNS is roughly ten million dollars. ‘Tax loss’ (accumulated losses) means potential value in a profitable future scenario of the Swedish corporate tax rate of 22% of total investment to date (assumedly roughly the $56M bid, or $12M). Aspiro is not required to pay corporate taxes until original investment is recouped.
So basically a group of 120 minority shareholders (representing over 10% of total shares) are griping that the major owners did a deal without consulting them, that undervalued the company by at least $22M. Further, they are unhappy that this deal will not make their investment in Asipo a profitable one.
BTW, I would agree with these shareholders. WiMP/Tidal has not got Jimmy Iovine or Ian Rogers, but otherwise it is more valuable than Beats Music was when acquired by Apple as part of a larger deal that valued that streaming service at $500 million according to Apple’s internal breakdown.
Viewed that way $56 could be considered a steal.
From the HotSeat,
Tom McAlevey, CEO Radical.FM