UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 8)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange Act of 1934
SKULLCANDY, INC.
(Name
of Subject Company)
SKULLCANDY, INC.
(Name
of Person Filing Statement)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
83083J104
(CUSIP Number
of Class of Securities)
Patrick Grosso
Vice President, Strategic Initiatives and Corporate Affairs,
Chief Legal Officer and Secretary
Skullcandy, Inc.
1441
West Ute Boulevard, Suite 250
Park City, Utah 84098
(435) 940-1545
(Name,
address and telephone number of person authorized to receive notices and communications
on behalf of the persons filing statement)
With copies to:
Cary K. Hyden
David M.
Wheeler
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626
(714) 540-1235
¨
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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Purpose of Amendment.
This Amendment No. 8 (this
Amendment
) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 of Skullcandy,
Inc. (the
Company
) filed with the Securities and Exchange Commission (the
SEC
) on July 6, 2016 (as may be amended or supplemented from time to time, the
Schedule 14D-9
). The Schedule
14D-9 relates to the tender offer by Powder Merger Sub, Inc., a Delaware corporation (
Purchaser
) and a direct wholly owned subsidiary of Incipio, LLC, a Delaware limited liability company (
Parent
), to purchase
any and all of the issued and outstanding shares of the Companys common stock, par value $0.0001 per share (the
Company Shares
), other than any Company Shares that are owned immediately prior to the commencement of the Offer
(as defined below) by Parent, Purchaser, the Company or any of their wholly owned subsidiaries, at a purchase price of $6.10 per Company Share (the
Offer Price
), net to the seller thereof in cash, without interest and less any
required withholding taxes, upon the terms and subject to the conditions set forth in the Amended Offer to Purchase, dated August 3, 2016 (as may be amended or supplemented from time to time, the
Offer to Purchase
), and in
the related Amended Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, constitute the
Offer
). The Offer is described in a Tender Offer Statement on Schedule
TO (as may be amended or supplemented from time to time, the
Schedule TO
) filed by Parent and Purchaser with the SEC on July 6, 2016, as amended. The Offer to Purchase and the Amended Form of Letter of Transmittal are filed
as Exhibits (a)(1)(F) and (a)(1)(G), respectively, to the Schedule TO.
Except as otherwise set forth below, the information set forth in the Schedule
14D-9 remains unchanged and is incorporated by reference as relevant to the items in this Amendment. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Schedule 14D-9. This Amendment is being filed to
reflect certain updates as reflected below.
Item 4.
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The Solicitation or Recommendation
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Item 4 of the Schedule 14D-9 is hereby
amended and supplemented by adding the following after the final paragraph under the heading Background and Reasons for the Company Boards RecommendationBackground of the Offer:
On August 13, 2016, Mill Road submitted to the Company an unsolicited written indication of interest to acquire all of the
Companys outstanding shares of Common Stock for $6.50 per share in cash, on terms materially identical to the July 28 Mill Road Proposal, other than the increased price per share and an increased termination fee of approximately $7.1
million (the
August 13 Mill Road Proposal
).
Later that day, the Strategic Transactions Committee met by telephone with
management and representatives of PJSC and Latham to discuss the August 13 Mill Road Proposal. The Strategic Transactions Committee discussed the terms of the August 13 Mill Road Proposal, as well as the relative timing of the proposed
transactions with Parent and Mill Road, the potential risks associated with a delay in a proposed transaction with Mill Road relative to the current proposed transaction with Parent, the required payment of the $6.6 million termination fee to Parent
under the Merger Agreement if the Company were to terminate the Merger Agreement to enter into a Superior Proposal (as defined in the Merger Agreement), and the terms of the equity and debt commitments presented by Mill Road as part of the
August 13 Mill Road Proposal. However, the Strategic Transactions Committee also noted that Mill Road orally stated that it had not yet obtained approval from its debt financing sources and was not currently prepared to provide executed
signature pages to be held in escrow pending a final determination of the Company Board. After deliberations, the Strategic Transactions Committee determined that the August 13 Mill Road Proposal was reasonably likely to lead to a Superior
Proposal, and directed representatives from PJSC and Latham to seek to obtain those remaining items from Mill Road, and to negotiate to have Mill Road pay for the $6.6 million termination fee payable under the Merger Agreement if the Company were to
terminate the Merger Agreement to enter into a transaction with Mill Road.
On August 14, 2016, Mill Road rescinded the August 13
Mill Road Proposal, and provided to the Company a revised indication of interest to acquire all of the Companys outstanding shares of Common Stock, which lowered the price to $6.25 per share from $6.50 per share in cash, and on terms
materially identical to the August 13 Mill Road Proposal, other than the decreased price per share and a revised termination fee of approximately $6.8 million (the
August 14 Mill Road Proposal
). Mill Road informed the Company
that it had still not obtained approval from its debt financing sources and was not currently prepared to provide executed signature pages to be held in escrow pending a final determination of the Company Board. Mill Road also communicated that it
would be unwilling to pay the $6.6 million termination fee payable under the Merger Agreement if the Company were to terminate the Merger Agreement to enter into a transaction with Mill Road.
Later that day, the Strategic Transactions Committee met by telephone with management and
representatives of PJSC and Latham to discuss the August 14 Mill Road Proposal. The Strategic Transactions Committee discussed the terms of the August 14 Mill Road Proposal, including the speed and magnitude of Mill Roads reduction
in price, and the size of the $0.15 premium relative to the Offer Price. The Strategic Transactions Committee also noted that Mill Road still had not obtained approval from its debt financing sources and was not currently prepared to provide
executed signature pages to be held in escrow pending a final determination of the Company Board. The Strategic Transactions Committee also noted Mill Roads unwillingness to pay the $6.6 million termination fee that would become payable by the
Company pursuant to the Merger Agreement, which represented potential exposure to the Company that was greater than the additional consideration of the price premium proposed by Mill Road. The Strategic Transactions Committee also discussed the
Companys negotiating history with Mill Road to date, and the significant delay and risk to closing inherent in terminating the existing transaction with Parent related to the proposed transaction with Mill Road. After deliberations and
confirming Mill Roads lower offer price in the August 14 Mill Road Proposal, the Strategic Transactions Committee determined that the August 14 Mill Road Proposal was not reasonably likely to lead to a Superior Proposal. As a result
of that determination, pursuant to the terms of the Merger Agreement, the Company was obligated to cease its discussions and negotiations with Mill Road.
On August 15, 2016, the Company issued a press release announcing the receipt of the August 13 Mill Road Proposal and the
August 14 Mill Road Proposal, the determination of the Strategic Transactions Committee that the August 14 Mill Road Proposal was not reasonably likely to lead to a Superior Proposal and confirmation that the Company Board continues to
recommend the Offer and the Merger.
Item 9 of the Schedule 14D-9 is hereby amended and supplemented by inserting the
following exhibit thereto:
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Exhibit No.
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Description
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(a)(20)
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Press Release issued by the Company, dated August 15, 2016 (incorporated by reference to Exhibit 99.1 of the Companys Current Report on Form 8-K filed with the SEC on August 15, 2016).
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
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Skullcandy, Inc.
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By:
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/s/ Patrick Grosso
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Name:
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Patrick Grosso
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Title:
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Vice President, Strategic Initiatives
and
Corporate Affairs, Chief Legal
Officer and Secretary
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Dated: August 15, 2016
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