From Investor Village:
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There was no bump up in price as part of the contemplated settlement. Kudelski is not paying shareholders any additional money as part of this agreement. The agreement reached sought to remedy a couple of matters we alleged were coercive in addition to requiring the company to make some further disclosures.
The first matter we were concerned about was the potential that Kudelski, S.A. might seek to delist the shares where Kudelski had simply acquired a majority share ownership, but not all of the shares. We were concerned that a delisting would render the shares unmarketable and severely depress the current value of the remaining shares. This part of the deal required that Kudelski would not seek to have OpenTV de-listed from the NASDAQ Global Market for at least 6 months from the expiration of the Transaction.
Second, we were concerned that since OpenTV is a corporation organized under British Virgin Islands (“BVI”) law, that Kudelski arguably had no duty to make the same offer of at least $1.55 for the remaining non-tendered shares. We thus wanted an assurance from Kudelski which we received (see MOU) that if Kudelski did obtain 90% or more of the Class A shares that it would offer at least (not less than) this same amount for the remaining OpenTV Class A shares. Also, if Kudelski obtained 90% or more of the voting power [Remember Kudelski owned all of the Class B shares and the voting power that went along with these shares and owned a large block of the Class A shares as well] of OpenTV, and if Kudelski chose to cause OpenTV to redeem the remaining OpenTV shares within 18 months of the Transaction, that Kudelski would redeem at least at the same $1.55 price. Here, the concern was that Kudelski might seek to redeem at an even lower price once he controlled 90% or more of the voting power.
Also, in connection with the MOU, we obtained a number of disclosures which were made prior to the closing of the Transaction. Principal among the disclosures was a comparison of multiples from other selected broadcasting solutions vendors. As you’ll see in the chart (attached to the MOU that I sent to you, Ex. A at pp. 4-5), we wanted to communicate to tendering shareholders that other Selected Broadcasting Solutions Vendors had significantly higher multiples than OpenTV. In the end, however, these disclosures did not dissuade enough shareholders from tendering at $1.55, because Kudelski achieved its targets at the Transaction Closing. The MOU I sent you describes these matters in more detail. The MOU does not prevent shareholders from seeking their own individual appraisal rights.
Payment of Attorneys’ fees, if at all, would come from Kudelski (the acquirer), as we were challenging both what we viewed to be the coercive aspects of the deal offered by Kudelski and its failure to make certain key disclosures which we thought should have been to shareholders.
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