Apparently in India it is not illegal to send unsolicited bids to North American publicly traded companies to spur liquidity that enables you to get out of your own large net loss positions in said firms:
Sakthi Global Holdings, OTC MARKETS has announced that it has submitted an unsolicited Merger Proposal to DHX Media offering Shareholders of DHX Media $5.32 per share upon the completion of a Merger of Sakthi Global Holdings and DHX Media the $5.32 per share payable to DHX Media Shareholders will be comprised of $1.32 per share in cash and $4.00 Per Share in common stock of the merged entity, with Sakthi Global shareholders emerging as the majority shares holders of the combined companies. The merger offer is contingent upon 80 per cent of the shareholders of DHX Media accepting the offer and voting in favour of the Merger at Special Meeting of Shareholders to be convened for the purpose of voting on the proposal made by Sakthi Global Holdings Limited
I believe the (TSX: DHX) DHX board of investors are waiting for the unsolicited bid to come through international Canada Post, but the package has been held up in customs, and will take about 3 months to clear before they will be able to formally look at it.
On a more serious note, before this I was looking at the DHX debentures (TSX: DHX.DB) in early May and passed on it, although I’ll add that this is getting to the point of being an interesting speculative instrument if it goes any lower – the valuation of intellectual property works such as Peanuts (the Charlie Brown franchise which they dumped a 39% stake in to Sony Japan) for $234 million in July 2018 was a pretty good sale. For those that were ever interested in speculating on the value of artwork and the public’s institutional memory, this is a reasonably close proxy. Somehow I don’t think the names of Teletubbies (which causes mental erosion in children) or Strawberry Shortcake will fetch nearly as much, but I think Inspector Gadget in the right hands could make a comeback!
I do own some of the DHX converts. I do think its more likely DHX gets bought as opposed to go bankrupt and there is change of control protection.
What price the equity goes for, I have no idea.
Here is long write up from an equity bull:
https://docs.wixstatic.com/ugd/718a37_7068e21069394a66a3dd8051699ea26b.pdf
Easy for them to write about it when they claim to have gotten mostly in at US$0.80/share!
The economics of production of these works has really changed in the age of abundance. Franchises are much more difficult to establish without massively large institutional memories (Peanuts comics being in newspapers for several decades, for example).
I don’t think the debentures at 74 are a terrible pick, but I can see reasonable cases made for lower and a par maturity at weighted probabilities that would warrant the current price (the option value at CAD$8/share is safe to say not worth a lot now).
I also hold the DHX debentures. I do think the IP is worth something, especially in this day and age of streaming. All these services need content. It would not be surprising to me to see a Netflix or an Apple scoop up DHX for their existing franchises.
Now I have the Inspector Gadget theme song stuck in my head so thanks for that.
For your viewing pleasure:
https://www.youtube.com/watch?v=EcF2LOaLgA0
Not sure why you are making the statement that Sakthi had and divested a stake in DHX??
Would really love to know the source of it… If true, the OSC should take a little trip to Delhi.
That statement was satire.
Takes about 5 minutes, however, to research the validity of the release itself. It’s relatively damning regarding a pink sheet shell corporation so I’m not writing about it.
I agree with you… But I’m just wondering what Sakthi would have to gain from this?
With your satire statement, at least, there was an actual real sense to the PR… Now, it’s just a joke and begs the question : Why???
@George: “Why???”
I’m not sure, but I’m strongly mulling over an unsolicited takeover bid of Amazon.com by issuing 6 quintillion shares of Divestor Investments, Inc. and taking AMZN private. Bezos should get the letter in the mail soon enough.
I’m sure you can get TD and RBC to back you up and finance part of your offer… and perhaps Canaccord can make a fairness opinion to convince AMZN shareholders…
For what it’s worth, I know that the Chinese often make first and sometimes second bogus offers before eventually striking a deal with management of assets they wish to acquire… It’s a tactic like another… I’m wondering if there isn’t a tactic to this… It would probably be impossible for them to acquire all of DHX due to the foreign ownership restrictions, but maybe they want particular assets?? I say sell them the Teletubbies for 75-100M$… They desperately need to lower the debt anyways!
I would love to see an update of this post. So much has happened since! Looks like the dust might be settling, letting us see the future a bit better.
They raised $60 million on a rights offering which helps their leverage situation (and gives the debenture valuation a boost). Had a reasonably good Q4. Changed their name, and are trying to monetize their library, but all things considered they still have a lot of debt in relation to their cash flows.