Outdoor Channel Holdings said it would voluntarily delist its shares from the NASDAQ stock exchange after its planned merger with InterMedia Partners is completed next month.
Outdoor Channel agreed on Nov. 16 to a merger deal with InterMedia, the parent of The Sportsman Channel, which would create a new publicly traded company, InterMedia Outdoor Holdings (IMOH).
Shareholders have the option of accepting $8 per share in cash for their Outdoor Channel shares — an 11% premium to their close Nov. 15 — or one share of the new entity for every Outdoor share they own, according to the deal. The two companies have set aside $115 million in cash to distribute to shareholders. In addition, Outdoor also declared a special one-time dividend of 25 cents per share in cash that will be distributed on or about Dec. 7 to shareholders of record as of Nov. 27. After the deal closes, Outdoor shareholders are expected to control about 32.4% of the new entity, with InterMedia controlling the remaining 67.6%.
According to documents filed with the Securities and Exchange Commission Friday, Outdoor said if the InterMedia merger is approved at a scheduled March 13 special meeting of shareholders, it expects the deal to be completed by March 14. At that time OUtdoor Channel shares would be delisted and the common stock of IMOH would begin trading on NASDAQ.
In the meantime, the shareholders meeting could be somewhat contentious after a group that claims it owns more than 2% of Outdoor Channel stock sent a letter to the network's board of directors claiming the company ran a poor auction process. According to a statement, UTR LLC, a Beverly Hills, Calif., investment group for high net worth individuals that claims to own 550,000 Outdoor Channel shares, called for an immediate halt to the merger, adding that the InterMedia deal does not represent the best deal for shareholders.
In a report in the New York Post, UTR also claimed to have a group of Hollywood heavy hitters interested in making a competing bid for Outdoor Channel. The company would not say who those potential investors were.
In a letter to Outdoor Channel's board of directors on Feb. 12, UTR also demanded that Outdoor Channel appoint an independent firm to separately evaluate the network and to conduct an open bidding process.
UTR's chances of successfully blocking the deal are slim -- Outdoor Channel founders Perry and Thomas Massie, who own about 36% of the company's outstanding stock, have already said they would vote in favor of the deal.
So far UTR hasn't filed a formal suit to block the merger, but sources said it has heard from other disgruntled shareholders, which should make Outdoor's March 13 meeting an interesting one.