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Maker Studios Approves Disney Bid, Rejects Relativity Media offer

Apr 15 2014, 3:05am CDT | by , in News | Technology News

Maker Studios Approves Disney Bid, Rejects Relativity Media offer

Disney announced last March that it will acquire Maker Studios, the popular online video content creator on YouTube. Disney is willing to spend $500 million in cash and an additional $450 million in additional stock, provided that performance targets are met.

But a last-minute bid by Relativity Media threatened Disney's bid. Relativity Media, a rising film-studio founded by Ryan Kavanaugh, was willing to pay more - a bid worth $1.1 billion. Relativity offered $525 million in stock and cash, plus a $500 million earn-out and an additional $75 million bonus to key executives.

“Relativity has sent to the board of Maker Studios a letter of intent detailing an offer to buy the company that we believe is superior to the current offer from Walt Disney,” a company spokesman said.“Relativity's proposal fully values Maker Studios while providing its shareholders far more upside potential for growth than the Disney offer.”

In spite of the higher offer, Maker Studios rejected Relativity Media's eleventh-hour bid. According to Maker Studios, the majority of its shareholders have already  approved Disney's offer.

 

“As per the announcement made on March 24, Maker Studios has entered into a merger agreement with The Walt Disney Co.,” a spokeswoman for Maker Studios said. “The agreement has been approved by Maker Studios’ board of directors and the majority of its shareholders and is expected to close in the next few weeks, subject to regulatory approval.”

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