Group Led By Former Chairman And CEO Kaleil Isaza Tuzman Revises Acquisition Offer And Raises Concerns Regarding KIT Digital Sale Process
NEW YORK, Feb. 11, 2013 /PRNewswire/ -- Dear KIT digital board of directors:
In an open letter to you on November 23rd, 2012, a group led by me outlined our disappointment with the direction you have taken KIT digital, Inc. ("KITD" or the "Company"), made a preliminary bid to take the Company private, and offered a detailed operational plan to recover value for shareholders. On December 5th, 2012, we revised our contingent bid for the Company in another open letter to the board—to a range of $1.35 -$1.70 per share—representing a 112% premium to the $0.72 closing price of the Company's shares on December 4, 2012.
While you insinuated to KITD shareholders at the time that our bid lacked bona fide capital support, you have in fact been confidentially aware of two large private equity firms with whom we have partnered and have known that we possess the capability to complete this transaction. Nevertheless, during the course of December 2012 your only meaningful response to our offer was a requirement that we agree to a two-year standstill in order to engage in any discussions regarding an acquisition of the Company. We do not believe that requiring us, or any other party, to execute a standstill as a condition to initiate discussions regarding a potential acquisition is in the best interest of shareholders at this juncture. This view is underscored by our knowledge of other bidding groups who executed standstill agreements in connection with the Company's previously disclosed strategic transaction process and have been subsequently unable to obtain general responses and specific due diligence information from the Company.
We believe your approach of requiring prospective buyers to agree to long-term standstills and the subsequent unresponsiveness of KITD management represents a purposeful approach to eliminate open competition for the Company's assets, thereby eroding the value of the Company and denying shareholders value they would otherwise receive in a competitive acquisition transaction.
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