PR Newswire
NEW YORK, Dec. 8, 2015
NEW YORK, Dec. 8, 2015 /PRNewswire/ -- Adam Wyden of ADW Capital Partners, L.P. ("ADW Capital"), a New York City based hedge fund that beneficially owns approximately 8% of IDW Media Holdings, Inc. (the "Company") (OTCBB: IDWM), transmitted today a letter to the board of directors (the "Board") and management, urging the Board to initiate a competitive sales process to sell the Company to a strategic buyer. As one of the Company's largest shareholders, ADW Capital does not believe the Company should remain an independent public company due to the concentration and illiquidity of the Company's stock and the Company's lack of scale in an increasingly competitive market. ADW Capital believes a sale of the Company to the right strategic buyer would not only maximize the return of value to shareholders, but also provide the Company access to capital and resources that would allow the Company to grow.
Found below is the full text of Mr. Wyden's letter to the Company:
December 8, 2015
IDW Media Holdings, Inc.
c/o Howard Jonas, Chairman
11 Largo Drive South
Stamford, CT 06907
Dear Board and Management of IDW Media Holdings, Inc.,
I commend the Board of Directors (the "Board") and management on IDW Media Holdings, Inc.'s ("IDW" or the "Company") successful separation from parent company, IDT Corporation (NYSE: IDT), and the steps it has taken over the last six years to drive growth and profitability. As you know, ADW Capital Partners, L.P. and its affiliates (collectively, "ADW Capital") have been long term shareholders of the Company since its spin-off and have almost unilaterally approved with the capital markets and operational decisions the Company has made to date, including its self-tender offer in late 2009 and its decision to open the IDW Entertainment division in 2013.
Notwithstanding these accomplishments, the Company is at a crossroads today and, as a substantial shareholder, I believe I have identified the most advantageous path for the Company going forward. Bluntly, it does not make sense for IDW to continue as an independent, publicly "traded" company and the Board should immediately hire a financial advisor to pursue a sale of the Company.
I have arrived at this conclusion for the following reasons:
Perhaps most important to our analysis is that while IDW has successfully grown its publishing and games business, its recent foray into entertainment (television, film, etc.) adds a substantial layer of complexity / volatility to the Company's financials and operations, will require increased disclosure and specific expertise, and will also require substantial amounts of capital over time. The Company cannot efficiently access this capital as a sub-scale independent public company.
The Company is in an enviable position as the fourth largest comic book publisher by dollar share. I am consistently amazed by the quality of the Company's leadership and their ability to source, incubate, and add to their growing library of content/intellectual property. The creative talent, ingenuity of management, and library of content would be invaluable to many large scale players who are starved for new funnels of content on their growing distribution platforms.
The proliferation of the internet and the jockeying for position of various "over the top" providers (Netflix, HBO NOW, Amazon Prime Instant Video, Hulu, etc.) has not only made libraries of original content more valuable, but also increased the overall demand for content in the aggregate. I do not expect this to change. What does seem clear is that there is a much higher degree of success in TV / Entertainment when a small "studio" like IDW can leverage the marketing, advertising, and social media resources of a larger distribution platform.
It should also not be lost on management or the Board that control premiums in the marketplace for portfolios of content are at record highs. The Company should try to structure a stock-for-stock transaction with a larger public company that would allow current shareholders to receive a premium for their stock, while allowing them the option to participate in the value and synergy IDW will add to the new platform.
I am asking the Board to do the right thing for all shareholders today. By seeking a strategic partner at this stage in the game, the Company can maximize the return of value to shareholders while also providing the Company resources to grow, without many of the competitive risks of staying a small and illiquid dual-class independent public company.
ADW Capital and its affiliates beneficially own approximately 8 percent of the Company's shares and urge the Board to take our recommendations seriously. I look forward to hearing your response.
Sincerely yours,
Adam D. Wyden
Managing Member of ADW Capital Partners, L.P.
For further information:
Adam D. Wyden,
e-mail: adam@adwcapital.com
tel: 646-684-4086
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/adw-capital-partners-lp-urges-idw-media-holdings-inc-to-pursue-a-sale-of-the-company-300189862.html
SOURCE ADW Capital Partners, L.P.
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