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RealTime IT News

Liquid Amends Alliance Entertainment Deal

Redwood City, Calif.-based Liquid Audio on Monday announced it would amend terms of its merger agreement with Alliance Entertainment, a deal that gives Alliance a bigger stake of the combined firm.

The digital media software firm, which was acquired last month in an all-stock transaction, said the amended agreement would give Alliance a 74 percent chunk of the combined company. When the deal was first announced, Liquid Audio said it would issue about 46.2 million new shares to Alliance, which would own a 67 percent majority stake in the new entity.

Under terms of the amended deal, Liquid Audio plans to conduct a self-tender offer under which it would acquire 10 million shares of at $3.00 per share in cash in connection with the merger.

"Approximately 12.75 million shares of Liquid Audio stock would remain outstanding after completion of a fully-subscribed tender offer. After the resulting merger, Liquid Audio stockholders will own 26 percent of the combined enterprise and Alliance Entertainment stockholders will own 74 percent," the company said.

Liquid Audio also disclosed that its board of directors also considered a proposal by Steel Partners to purchase the company outright for $2.75 per share but found the offer "inadequate."