RMG Networks Holding Corp.'s special committee of independent directors June 5 announced that the "go-shop" period in its existing merger agreement with SCG Digital LLC has ended and that the company has received an alternative acquisition proposal from a third party.
Under the terms of the offer, RMG Networks, or its successor, would remain a public company. Additionally, existing RMG stockholders would not receive any cash consideration and would continue to own their shares of the company's stock.
As the proposal is not sufficiently detailed or definitive at this stage, it has not established whether the alternative acquisition proposal constitutes a superior proposal. As a result, the special committee has not changed its recommendation with respect to the company's pending sale to SCG Digital, an entity controlled by RMG Executive Chairman Gregory Sachs.
Pursuant to the terms of its April 3 merger agreement with SCG Digital, the company and its advisers were allowed to actively solicit alternative acquisition proposals during a "go-shop" period. Subject to certain requirements, the special committee has the right to terminate the merger agreement with SCG Digital in order to accept a superior proposal.
