Author Topic: RMGN - RMG Networks  (Read 2617 times)

writser

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Re: RMGN - RMG Networks
« Reply #10 on: May 13, 2018, 12:08:48 PM »
Yes.  Since DRW did not enter into the voting agreement, why would they vote for the transaction

This is just my reasoning: take it with a grain of salt.

First of all, according to the proxy, when the Sachs bit was on the table the board contacted DRW. DRW indicated they weren't interested in 'further investing in the company OR proposing an alternative transaction'. I read this as: we are fine with the Sachs bid. What's the alternative explanation? They are super insulted but don't have any spare cash? Or: they don't want to buy the company, they don't want to sell the company, they just want to sit on their 40% stake and run the company into the ground?

Second, why would DRW voluntarily enter into a voting agreement? It would limit their options, it might appear as a conflict of interest and it could even make it more difficult to pass the vote! AS Hillfronter pointed out, with DRW being an independent shareholder Sachs and DRW can basically pass any vote together. If DRW would be considered part of the rollover group they'd actually have to find enough independent shareholders to vote for the deal. Not sure about the legal specifics but you could argue the safest (and easiest) thing to do is not signing the voting agreement.

Finally, take a step back and think about the incentives of the parties involved: you own 18% of a company and a guy you've known for decades, who you've partnered with multiple times, who participated with you in a rights offering at $0.62 in 2016, owns ~40% of shares outstanding. What are the chances you haven't even discussed the deal with him? What are the chances you would even bother to try to take the company private if you think your buddy is going to vote against it? What are the chances you will try to fuck him over?

Maybe I'm too naive but I think the simplest explanation is often the best one: DRW is fine with the deal - I see nothing to contradict that in the proxy. They didn't sign a voting agreement because a) what would be the upside of that and b) it's a hassle and it could actually make things more complicated. If DRW doesn't like the deal: why haven't they made a counterbid? Why don't they want to provide financing even though they did so in 2016? Why haven't they issued any press releases or shareholder letters? Why wouldn't they have told Sachs?

If you have an alternative interpretation of the facts that makes more sense I'd be happy to hear it.
« Last Edit: May 13, 2018, 12:11:29 PM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.


Foreign Tuffett

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Re: RMGN - RMG Networks
« Reply #11 on: May 15, 2018, 04:16:36 PM »
Yes.  Since DRW did not enter into the voting agreement, why would they vote for the transaction

This is just my reasoning: take it with a grain of salt.

First of all, according to the proxy, when the Sachs bit was on the table the board contacted DRW. DRW indicated they weren't interested in 'further investing in the company OR proposing an alternative transaction'. I read this as: we are fine with the Sachs bid. What's the alternative explanation? They are super insulted but don't have any spare cash? Or: they don't want to buy the company, they don't want to sell the company, they just want to sit on their 40% stake and run the company into the ground?

Second, why would DRW voluntarily enter into a voting agreement? It would limit their options, it might appear as a conflict of interest and it could even make it more difficult to pass the vote! AS Hillfronter pointed out, with DRW being an independent shareholder Sachs and DRW can basically pass any vote together. If DRW would be considered part of the rollover group they'd actually have to find enough independent shareholders to vote for the deal. Not sure about the legal specifics but you could argue the safest (and easiest) thing to do is not signing the voting agreement.

Finally, take a step back and think about the incentives of the parties involved: you own 18% of a company and a guy you've known for decades, who you've partnered with multiple times, who participated with you in a rights offering at $0.62 in 2016, owns ~40% of shares outstanding. What are the chances you haven't even discussed the deal with him? What are the chances you would even bother to try to take the company private if you think your buddy is going to vote against it? What are the chances you will try to fuck him over?

Maybe I'm too naive but I think the simplest explanation is often the best one: DRW is fine with the deal - I see nothing to contradict that in the proxy. They didn't sign a voting agreement because a) what would be the upside of that and b) it's a hassle and it could actually make things more complicated. If DRW doesn't like the deal: why haven't they made a counterbid? Why don't they want to provide financing even though they did so in 2016? Why haven't they issued any press releases or shareholder letters? Why wouldn't they have told Sachs?

If you have an alternative interpretation of the facts that makes more sense I'd be happy to hear it.

I agree 100% with basically all of this.

writser

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Re: RMGN - RMG Networks
« Reply #12 on: May 22, 2018, 12:45:34 AM »
Go-shop period extended for two weeks.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Foreign Tuffett

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Re: RMGN - RMG Networks
« Reply #13 on: May 22, 2018, 06:49:30 AM »
Go-shop period extended for two weeks.

Maybe another party has shown some interest in the company? We can hope....

writser

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Re: RMGN - RMG Networks
« Reply #14 on: May 22, 2018, 07:07:52 AM »
We'll see. I have my doubts about the relevance of this news (could very well be a delay on technical grounds) but yeah, maybe we get lucky. I'm not adding, still happy with my current position sizing.
« Last Edit: May 22, 2018, 07:17:36 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.