Reservoir Media Receives Rival Bid After Irenic Offer

Late last week, news surfaced that activist investor Irenic Capital Management had submitted an unsolicited bid to purchase independent music company Reservoir Media. Now a competing offer has emerged from existing shareholders Wesbild and Richmond Hill Investment Co.

The offers:

• Irenic valued Reservoir at between $1.1 billion and $1.2 billion, including debt, at $10.00 to $11.00 per share.

• The new, unsolicited, non-binding proposal from Wesbild and Richmond Hill Investment Co. would see them acquire all outstanding shares of the company they don’t already own at $10.50 per share in cash, as per Music Business Worldwide.

• Reservoir’s portfolio includes more than 150,000 copyrights and approximately 36,000 master recordings, including releases by artists such as Miles Davis, Joni Mitchell, John Denver, and Sheryl Crow.

Existing interests:

• Wesbild currently holds approximately 44% of Reservoir’s equity, and Richmond Hill 21%, a combined stake of 65%. That offers substantial voting power over shareholder-approved transactions.

• Irenic holds approximately 9.2% of Reservoir’s equity.

• Wesbild is a subsidiary of Persis Holdings, which was founded by the father of Reservoir head Golnar Khosrowshahi.

Next steps:

• Reservoir’s board has created a special committee of “independent and disinterested” investors to evaluate the proposals as well as “any other alternatives,” as per Digital Music News.

• Reservoir has indicated it will make no further comment until “further disclosure is appropriate or required.”