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I've been out today, but some thoughts (posted also on the other bb).
Firstly, this morning's rns's were presumably triggered by the Sky story last night. The Tap rns disclosed the potential deal in terms of intention "the terms of the combination are intended to be set such that Taptica will issue 16 new Taptica shares for each 19 RhythmOne shares held by RhythmOne shareholders" but the R1 rns said only that it was a potential all-share offer.
Secondly, there was no statement of any commitments of support having been received from R1 or Tap shareholders. Maybe that was just because the deal wasn't ready to be announced (in terms of drafting the press release describing the benefits) but maybe it was because no R1 shareholders are prepared to give such commitments.
Given the ratio and the timing of Tap stopping its own share buyback (bought only on 13th December, having said on 12th December that there were no acquisition conversations ongoing) it strikes me as likely that R1 reactivated discussions with Tap in mid-December on the basis of an exchange ratio that was based on a £3+ TAP price (TAP price crashed from over £3 to under £2 on 4th December).
With Tap at £3 and R1 at under £2, the 16:19 ratio would have indicated a good premium for R1 shareholders.
So it strikes me as reasonably credible that the parties have been stuck for some time arguing about whether that ratio should be revisited given the crash in the Tap shareprice, or whether that crash should be regarded as temporary mispricing due to the Tap newsflow (initially loss of CEO, but then doubts as to reason for halt to share buyback).
Leaking to Sky was perhaps thought by 1 or both parties to be a way to try to force the issue. Leak the story and see if that is enough to rebase the Tap share price given it provides a credible reason for the halt to the buyback.
Tap has bounced a bit today, but nowhere near the level needed to make the ratio look good to R1 shareholders given the recent shareprice.
If the Tap price continues to rise, then the offer might be confirmed, with major R1 shareholder support, at the indicated exchange rate. But if it doesn't make much progress then a change to the ratio or addition of some cash might become more likely.
In any event, I think there is quite a lot of time to go before we get to shareholder votes. I would think it quite likely that we will at least get Tap full-year results (March?) and probably R1 full-year results as well, or at least an R1 full-year TU. So plenty of time for market-moving news before the vote.
1GW, I agree this is an odd deal, and must have been initiated when TAP’s SP was at a premium to RTHM’s.
Presumably the 16 to 19 offer is required to make TAP the dominant company....but the offer also seriously undervalues R1 (I think most of us can agree). So we are really swapping R1 shares for an investment in TAP at a not very good rate for us. Do we really want to invest in TAP? Or is the merged company more valuable than the individual entities (based on R1's previous 'investments' then possibly not).
Even if TAP shares rose to 400p that wouldn't value R1 as very much (given that R1 pre-YUME was over 400p itself). I know, it's all historical stuff but it does make you think....especially when R1's 'profits' (stop laughing) are about to take off....certainly not guaranteed based on R1's SP alone.
Needs some additional cash on the table to seal the deal IMO...we should be able to tap TAP for some folding stuff.
Is the merged company more valuable than the individual entities ???.....YES I belive it will,so not looking such a bargain for holders here atm,but looking a bit further, then it makes some sense as despite all past promisses RTHM failled to make it on it's own.....IMHO.