Israeli app monetization developer (NYSE:IS) and US 3D computer game platform Unity Software (NYSE:U) are moving ahead with their merger, after Unity rejected an offer two weeks before AppLovin to merge, on the condition that the merger with ironSource cancels it. Last weekend, Unity submitted a detailed document to the US Securities and Exchange Commission (SEC) calling for a meeting of shareholders from the two companies to approve the merger, although no date for the meeting has yet been set.
Unity reconfirms ironSource merger, rejects AppLovin’s offer
Unit faces backlash from customers over IronSource merger
The two companies announced the merger in mid-July, giving IronSource a valuation of $4.4 billion, 74% more than its average share price in the 30 days before the deal was announced, although 57% below the value it began trading in NYSE. July 2021. The current value of Unity’s shares reflects the $4.85 billion value of ironSource.
In the Securities and Exchange Commission report, Unity says it plans to issue 27.3% of the shares to IronSource shareholders in the combined company (26.5% at full dilution). The balance will be maintained by the existing shareholders of the unit. In the event of the merger being canceled, the company that initiated the cancellation would be required to pay a $150 million fine to the other. Furthermore, if the cancellation comes after a company’s shareholders fail to approve the merger, a maximum of an additional $20 million in merger expenses.
Earlier this month, American advertising app company AppLovin, a competitor to ironSource, offered to buy Unity at a premium of 18% over its share price, on the condition that the Unity-ironSource merger was cancelled. But Unity’s board of directors decided in favor of the IronSource merger deal.
Last week, AppLovin investment bank JP Morgan asked bankers at Unity Morgan Stanley and Goldman Sachs whether there was “any appetite for a revised offer” but was told it could not be discussed under the terms of the merger, and no new terms were presented for the AppLovin deal.
Posted by Globes, Israel business news – en.globes.co.il – August 28, 2022.
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