All Active Asset Capital, a U.K.-based private equity firm that is stalking Audioboom for a possible go-private takeover bid, has signaled it may sweeten its offer and address some of the hurdles keeping a deal from being done. The overtures were made during a meeting last week between Audioboom and All Active Asset Capital, during which the podcaster was told that “a number of substantial initiatives” were being pursued.
Based on that development, the independent directors on Audioboom’s board have decided that it is in the best interest of the company to allow the discussions to continue. It now expects to have a better idea of whether a deal could be done by mid-September according to a filing with British regulators. Audioboom is traded in London and under U.K. securities laws All Active previously had until Aug. 16 to make a firm offer.
All Active Asset Capital earlier made a tentative $16.70 (£12) per share bid, which would value the go-private deal at $262 million. The offer – which All Active said represents a 35.6% premium over Audioboom’s stock price on July 16 – has appeared open for additional negotiations. All Active said in an earlier filing it “remains fully committed to continuing conversations and engaging further with Audioboom.”
But there is already support for a deal. The firm says more than a quarter of Audioboom’s equity holders have already given their “irrevocable support” to the offer, which would be funding with a mix of cash and shares in All Active. It did not say how much would be in in cash, but All Active recently raised $20 million and has commitments to raise another $188 million.
Nick Candy, the billionaire property developer, whose Candy Ventures is Audioboom’s largest shareholder, is said to be among those who are backing the go-private proposal. Candy Ventures holds a roughly 14.48% stake. The Dutch investment firm Aaqua B.V., which holds a 12.43% stake also supports the proposed takeover. Aaqua B.V. already has close ties with All Active.
But Audioboom’s independent board members have told shareholders that, in their view, the deal “significantly undervalues” the business and they do not see any “compelling logic to justify a combination of the two businesses.” The board also said it does not believe the offer structure proposed by All Active is “attractive” saying it would mean swapping shares traded on the London Stock Exchange or shares of All Access that are in limbo.
All Active’s stock was delisted July 30 and that it is a potential hurdle for any deal-making. While All Active says it is working on securing a re-listing of its shares on an international exchange – potentially in the U.S. – it acknowledged concerns about that have already been raised by Audioboom.
The offer is part of All Active’s larger effort to reform its investment portfolio over to technology-focused companies. In its announcement, All Active said it believes its combination with Audioboom “would create a compelling portfolio of innovative, high growth technology investments that could create significant new accretive value for the shareholders of both companies in the future.”
The potential of a sale reemerged in April when CEO Stuart Last said they would be open to suitors. “If a big business is looking to be in the space, and they are looking to acquire a company that is already scaled and has the potential to scale further, then Audioboom is in a prime position to take advantage of that,” Last told Bloomberg.
Audioboom considered several potential offers last year as part of an eight-month strategic review, but ultimately decided not to sell when its owners felt they undervalued the company. “There has been limited interest in paying the level of premium to the prevailing share price that the board considers would represent appropriate value for shareholders,” it announced last October.
Audioboom reported last month that its revenue during the first six months of 2021 nearly doubled compared to a year ago as it not only set a record during the second quarter compared to a year ago when the pandemic’s impact was the most significant.