OpenTV issues Kudelski prospectus
Chris Forrester
21-10-2009


Middleware company OpenTV is heavily embroiled in what could be a contentious $167m take-over by the Kudelski Group, which already owns 32.3% of OpenTV, and 77.2% of the voting power. Lobby organisation the Shareholders Foundation is arguing that the transaction appears to be unfair. New evidence is now emerging.

A ĎSolicitation/Recommendation Statementí issued Oct 20 by OpenTV Corp tells shareholders that a tender offer has been made. It also states bluntly that a special committee of OpenTVís directors formed to consider the original February offer of $1.35 a share made by Kudelski was paid $75,000 each (and the committeeís chairman received $90,000) just for considering the offer. Kudelski is now offering $1.55 a share. The normal annual fee, per director, is $50,000 although there are additional payments, usually of $10,000 for serving on specific company committees (audit, compensation) while the chairman of Open TVís board (Andre Kudelski) received $120,000, and the boardís vice-chairman (Jim Chiddix) received $100,000. These payments were in addition to normal salaries and bonus payment. Ben Bennett, CEO, received a total compensation package (2008) of $1.29m, plus assorted stock options.

Over the past year OpenTVís shares have traded as high as $1.97, and back in 2006 were traded at $3.86 a share.

The Oct 20 document delivers a near day-by-day account of the process which led up to this latest bid, including the formal June 2 decision that the initial bid was inadequate. The offer was improved upon on Oct 4, and will now be voted upon on November 6.