Video network will vote on acquisition offer from Disney this week
Relativity Media is trying to swoop in at the 11th hour and rob the Walt Disney Company of its prize.
The entertainment company has submitted a last-minute bid for Maker Studios that could hit $1.1 billion and could be substantially richer than the one the online video network recently received from Disney.
According to an amended offer that was sent to Maker's board on Monday morning, Relativity will pay $525 million in stock and cash, according to an individual familiar with the proposal. Under the deal, Maker would also be eligible for an earn-out of $500 million in stock and cash if it hits certain financial targets. Moreover, Relativity would offer $75 million in stock as part of a bonus pool it would make available to key talent and executives. The studio tweaked its deal slightly to bring more cash into the equation.
“Relativity has sent to the board of Maker Studios a letter of intent detailing an offer to buy the company that we believe is superior to the current offer from Walt Disney,” a company spokesman said in a statement to TheWrap. “Relativity's proposal fully values Maker Studios while providing its shareholders far more upside potential for growth than the Disney offer.”
In contrast, Disney's deal is more of a cash-based one. If approved, the studio will pay $500 million in cash for Maker, as well as $450 million in performance-based rewards. Maker's stockholders are supposed to vote on Disney's bid on Tuesday.
So what's in play? Maker offers either company a chance to be a leader in the burgeoning world of online video. The company's YouTube network boasts 55,000 channels, 380 million subscribers and 5.5 billion views per month.
“Relativity and Maker Studios are natural partners,” Relativity said in its statement. “We both share a commitment to challenging the status quo, breaking down old models that don't work and inventing new ones that do. We are confident the Maker Studios board and its shareholders will recognize the full value of the Relativity offer.”
Relativity's proposal has the approval of its board and, importantly, the blessing of Ron Burkle, a board member and key investor, according to an individual close to the studio.
Jefferies and Barclays will serve as Relativity's bankers on the transaction, the studio said.
In another wrinkle, former Maker Studios CEO Danny Zappin is trying to delay the company's sale to Disney and has asked California Superior Court to issue a temporary injunction until the video network resolves a suit he filed against it. Zappin sued Maker last summer, accusing the board of conspiring to kick him out and enrich themselves.
Representatives for Disney and Maker did not immediately respond to a request for comment.