In-flight broadband and content provider Global Eagle Entertainment has launched an offer to exchange 15 million of outstanding warrants for common stock. The company is offering 0.3333 shares for each outstanding warrant. This equates to an exercise…
In-flight broadband and content provider Global Eagle Entertainment has launched an offer to exchange 15 million of outstanding warrants for common stock.
The company is offering 0.3333 shares for each outstanding warrant. This equates to an exercise price of US$11.50 per share.
Global Eagle said the purpose of the transaction is to reduce the number of shares that would become outstanding upon the exercise of the warrants.
The company stated that a total of 22.8 million outstanding warrants are eligible for the exchange offer. Of this, 15.8 million were sold in its IPO in 2011 and seven million were issued to the company’s founders in a private placement in connection to the flotation.
Those founders, Harry Sloan and Jeff Sagansky, have agreed to tender all of their warrants.
Global Eagle’s other outstanding warrants, predominantly a result of its US$430m acquisition of satellite-based in-flight broadband service provider Row 44 and German in-flight entertainment solutions firm Advanced Inflight Alliance in early 2013, are not eligible for the offer.
In the second quarter of 2014, Global Eagle’s board authorised the repurchase of up to US$25m of the company’s public warrants. As of 30 June 2014, US$23.6m was still available for warrant repurchases under this authorisation. To-date the company has repurchased about 400,000 warrants at an average price just below US$3.50 per share.
This latest offer, which is not conditioned on the tender of any minimum number of warrants, expires on 11 September 2014.
Piper Jaffray & Co is acting as financial adviser on the offer with Morrow & Co as the exchange agent.
Global Eagle recently announced its second quarter 2014 results, reporting a 56% year-on-year and 14% sequential increase in revenues to US$98.1m. Adjusted EBITDA was also up substantially, 434% year-on-year and 27% sequentially to US$6.5m.
As of 31 July 2014, the company had US$220m in cash reserves.
