After a month of waiting (and Atari requesting more time to consider the offer), both companies have agreed to the proposed buyout merger. Atari will soon become wholly owned by their parent company; with a, uh, "donation" of $20 million which will "fund Atari's operational cash requirements during the period between the date of the merger agreement and its closing"- in other words, keep 'em going. Jim Wilson, newly appointed President and CEO of Atari, Inc. said:
The merger is said to "bring to a close a period of financial underperformance for Atari" as well as "offer Atari shareholders an all cash exit", among other notable bullet points. Hmm, maybe Alone in the Dark will make it out this year!
Full announcement after the jump.
Infogrames Entertainment S.A. and Atari, Inc. Announce Agreement to Merge
Infogrames to Acquire Outstanding Shares of Atari, Inc. for Cash
LYON, France and NEW YORK, April 30 /PRNewswire-FirstCall/
—Infogrames Entertainment S.A. (Euronext - ISIN: FR-0010478248)
("Infogrames" or "the Group") and Atari, Inc. (Nasdaq: ATAR) ("Atari")
today announced that they have reached a definitive agreement to merge.
The agreement:
— brings to a close a period of financial underperformance for Atari;
— strengthens Atari under Infogrames' new management team;
— delivers a platform for future growth in the US; and
— offers Atari shareholders an all cash exit.
Under the terms of the merger agreement, Infogrames will acquire the
remaining outstanding equity interests of Atari (other than shares of
common stock held by Infogrames or its affiliates, which would be
cancelled) for US$1.68 per share, equivalent to a cash payment of
approximately US$11 million. Infogrames is currently the majority
shareholder in Atari holding approximately 51.4%. Following the merger,
Atari will be a wholly- owned subsidiary of Infogrames. The merger will
be funded by Infogrames from existing cash resources. The transaction
is not subject to any financing conditions and is expected to close in
the third calendar quarter of 2008.
This agreement is an essential and positive development for
Infogrames and its shareholders. It brings Atari fully under the
control of Infogrames, delivering a platform for future growth in the
US. This step closely follows a series of recent major restructuring
actions implemented in an effort to reposition Atari, streamline its
corporate structure and reduce its annualized costs, including costs
related to being a US public company.
The Board of Infogrames believes that full ownership of a
restructured Atari is an important step for the Group, leading to a
simplified operating structure that will deliver greater efficiency,
provide the Group with greater opportunities to expand its US
distribution capabilities and strengthen its platform for its global
online initiatives.
Commenting on today's announcement, David Gardner, CEO, Infogrames, said:
"Bringing Atari US and Infogrames businesses together will enable us
to create a simplified global structure for our business as we seek to
re-build a well-managed, cohesive and financially disciplined company.
This is a key strategic event for Infogrames that will benefit all of
our shareholders. I believe that this transaction will generate
significant benefits for the Group."
The management of Atari, Inc., led by recently appointed President
and CEO, Jim Wilson, will join the Group upon the closing of the
transaction and remain focused on growing the key North American gaming
market.
Mr. Wilson said: "By joining Infogrames, we will have the
opportunity to further transform Atari. As part of this newly
integrated company, we will be better able to streamline operations and
have a stronger platform for growth in North America."
The transaction was negotiated and approved by the Special Committee
of the Board of Directors of Atari, consisting entirely of directors
who are independent of Infogrames. In approving and recommending the
merger transaction, the Special Committee considered, among other
things, the terms of the merger agreement, which permits the Special
Committee to terminate the agreement under certain circumstances,
Atari's financial position and results of operations, general market
and industry conditions, the risks of implementing Atari's business
plan, Atari's limited liquidity and the limited range of options
available to Atari. The Special Committee also considered the effects
of Infogrames' controlling interest, the risk that the transaction will
not be completed, the premium to Atari's share price 30 days prior to
the date of Infogrames' offer, and the willingness of Infogrames to
extend a loan of up to $20 million to Atari to cover expected capital
requirements.
The transaction is subject to a number of customary conditions,
including the approval of the holders of a majority of outstanding
shares. Atari expects to call a special meeting of shareholders to
consider the merger in the third quarter of calendar 2008. Since
Infogrames controls a majority of Atari's outstanding shares,
Infogrames has the power to approve the transaction without the
approval of Atari's other shareholders.
In connection with the transaction, Infogrames has committed to
lend Atari US$20 million, subject to the terms and conditions of the
credit agreement between Atari and Infogrames. This loan will be used
to fund Atari's operational cash requirements during the period between
the date of the merger agreement and its closing.
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