OpenTV Shareholders Should Act Now Before the November 6th TenderOffer Expiration
Nov. 2, 2009 (Business Wire) -- The Kudelski Group (SIX: KUD.VX) today commented on a letter issued to OpenTV Corp. (NASDAQ: OPTV) shareholders by Arcadia Capital Advisors, LLC, a short-term opportunistic shareholder, regarding the tender offer commenced by Kudelski on October 5, 2009 to acquire all outstanding Class A shares of OpenTV Corp. not already owned by Kudelski or its subsidiaries for US$1.55 per share in cash, implying a total equity value of at least US$215 million1.
Kudelski encourages OpenTV shareholders to disregard inaccurate and misleading statements recently made by Arcadia and reserves its specific commentary on and rebuttals of such letter for a later time. Arcadia’s rhetoric clearly ignores the competitive challenges OpenTV is facing and the business fundamentals of the company.
Further, Kudelski encourages OpenTV shareholders to keep in mind the following key elements:
PREMIUM ALL CASH OFFER AVAILABLE TO ALL OPENTV SHAREHOLDERS
The tender offer is compelling and open to all shareholders, but take note that Kudelski will not overpay for an asset it has controlled since 2007 and whose value is at significant risk.
OPENTV HAS SIGNIFICANT REVENUES AND PROFITABILITY AT RISK AS A STANDALONE COMPANY
OpenTV's ability to create shareholder value as a standalone public company is at serious risk due to the rapidly changing competitive landscape, and Kudelski believes that a material portion of OpenTV’s revenues within the current top 20 customer base are declining, with a continuing trend year-over-year in the future.
OpenTV is today the only remaining standalone middleware provider in a market where customer demand for middleware only products is weakening and where customers are increasingly opting for integrated end-to-end solutions.
MATERIAL INVESTMENTS NEEDED TO ENSURE OPENTV VIABILITY
Were OpenTV to remain independent, Kudelski would advocate through its majority position on OpenTV’s board of directors for a three-year expenditure of US$100 million to US$150 million on developing new technology and solutions through R&D, acquisitions and other strategic initiatives to ensure OpenTV a legitimate opportunity for viability as a standalone entity.
MAJOR OPENTV SHAREHOLDER RECENTLY SOLD MAJORITY OF ITS HOLDINGS AT AN AVERAGE PRICE BELOW TENDER OFFER PRICE
Kudelski is convinced that Arcadia is just repeating many of the assertions, which appeared to be inaccurate, previously made by Discovery Group regarding OpenTV’s value.
