Shareholders are urged by the independent board members of Sleep Cycle not to approve Velvet Cichlid's public buyout offer.
Sleep Cycle AB, the popular sleep tracking app company, is currently facing a takeover offer from Velvet Cichlid AB. In a statement issued on 28 December 2022, the Board of Directors of Sleep Cycle AB (publ) has recommended shareholders to not accept the offer.
The Offer, based on all outstanding shares in Sleep Cycle, amounts to approximately SEK 861.8 million. The price per share offered represents a premium of 33.6% compared to the closing price on 16 December 2022, but a discount of 39.3% compared to the Initial Public Offering price.
Velvet Cichlid AB has engaged BDO Corporate Finance as an independent expert to issue a fairness opinion on the public offer. BDO's opinion, as of the date of their opinion, is that the Offer is not fair from a financial point of view for Sleep Cycle's shareholders. The opinion is subject to the Company continuing operations as is and no unforeseen events in relation to the Company or its environment.
BDO's fairness opinion is based on established valuation methods and considers the Offer, discussions with Sleep Cycle's management, historical financial information, and other relevant information.
It is important to note that the Board's handling of the Offer has been without the participation of the Chairman of the Board, Lars Berg, due to a conflict of interest. The Board has appointed SEB Corporate Finance as financial advisor and Mannheimer Swartling as legal advisor in relation to the Offer.
Prior to the publication of the Offer Document, the Bidder has acquired 361,589 shares in Sleep Cycle, corresponding to 1.8% of the shares in the Company. Among these, 350,000 shares were acquired from Tredje AP-Fonden. However, the reasons for the Board's recommendation to shareholders not to accept the offer are not explicitly stated in the available information.
The Consortium, which includes GLA Invest SA, MCGA AB, h265 AB, and Petter Wallin, holds approximately 68.2% of Sleep Cycle's shares. After the announcement of the Offer, the Bidder has acquired 1.8% of the shares.
The statement is governed by and construed in accordance with substantive Swedish law, and any disputes arising will be settled exclusively by Swedish courts. The Offer values Sleep Cycle's shares at approximately SEK 42.50 in cash.
Shareholders are advised to seek professional financial advice before making a decision regarding the Offer. The full statement can be found on Sleep Cycle's official website.
- Despite the takeover offer from Velvet Cichlid AB valuing Sleep Cycle's shares at approximately SEK 861.8 million, BDO's fairness opinion deems it not financially favorable for Sleep Cycle's shareholders.
- The Board of Directors, in their statement, advise shareholders to seek professional financial advice before deciding on the takeover offer, as the reasons for their recommendation to not accept the offer are not explicitly stated in the available information.
