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- Instructure Sale Update: No bids received, a third of investor shares now against sale
Instructure Sale Update: No bids received, a third of investor shares now against sale
At midnight last night the Instructure 1 “go-shop” period, where the company could solicit and accept a superior bid to Thoma Bravo’s bid, ended with no new bids and a revised proxy statement. At the same time, there is much more investor protest against the sale, both from named investors and anonymous ones. A third of investors appear to be against the sale.
Revised Proxy Statement
As part of the process, Instructure has revised the proxy statement that is used to inform shareholders of relevant details leading up to the vote. They have also filed details about the end of the go-shop period.
The revised proxy also describes details on the shareholders’ vote:
The vote is scheduled for February 13, 2020.
The Directors and Executive Officers control approximately 10.1% of outstanding share and have already indicated they will all vote FOR the merger agreement (technical nature of the acquisition) and FOR the executive compensation plan.
The vote for the merger agreement is binding – they must get a majority of shareholder votes to complete the acquisition, but the vote for the executive compensation plan is non-binding (advisory).
More Investors Come Out Against Sale
At the same time, a fourth large investor (this one with a 1.5% share) has come out against the sale. As described by Bloomberg:
It looks like the protest goes beyond even the big four, again according to Bloomberg:
If approved by shareholders, the deal is expected to close before the end of March, 2020, allowing for final regulatory approval (anti-trust, primarily) and filing of final legal paperwork.
The big differences in this new no-shop phase are that Instructure may not actively solicit new bids and that the termination fee, should Instructure walk away from the Bravo agreement, rises from $29 million to $63 million.
The deal is not dependent on securing financing. This doesn’t mean that Thoma Bravo will not get debt financing for Instructure, but it does mean that their bid is secured with cash funds.
This one is still worth watching.
For more details on the information disclosed in the proxy statement, see the posts “Insights From Instructure Preliminary Proxy Statement” and “Instructure Sale: Two large investors against deal and claiming conflicts of interest (update – Three)“.
Disclosure: Instructure is a subscriber to the MindWires LMS Market Analysis data service (as are many of their competitors), and we have a number of investment firms who are also subscribers to the service and pay for in-depth market data and research.
1 Disclosure: Instructure is a subscriber to the MindWires LMS Market Analysis data service (as are many of their competitors), and we have a number of investment firms who are also subscribers to the service and pay for in-depth market data and research.
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