Reuters: Private Equity: UPDATE 1-Vector Capital becomes Technicolor's main shareholder

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UPDATE 1-Vector Capital becomes Technicolor's main shareholder Jun 20th 2012, 20:03 Wed Jun 20, 2012 4:03pm EDT PARIS, June 20 (Reuters) - Shareholders of Technicolor on Wednesday overwhelmingly backed Vector Capital's offer to take a stake in the tr oubled Fr ench digital video specialist against a rival bid by JPMorgan in the latest twist of a battle that went on for over a month. San Francisco-based Vector will become Technicolor's main shareholder despite the board's recommendation to vote for JPMorgan's latest offer, which was updated during Wednesday's shareholders meeting, and despite the deal signed between the two parties in May. JPMorgan's offer was rejected by 95 percent of voting shareholders while Vector's offer got 91 percent approval during the vote that took place four hours after the meeting had started. This decision puts and end to a battle that started in May and which saw the two funds outbid each other both seeking to invest in the company. Each offer targeted a maximum stake of 30 percent in Technicolor's capital. Vector Capital, which describes itself as a technology turnaround specialist, had last week raised the subscription price for its proposed reserved capital increase to 2.00 euros per share from 1.90 euros against a final offer of 1.90 euros from JPMorgan. "We are neither as large nor as old as JPMorgan. But the team that we have assembled can address the challenges and opportunities your company is facing," Alexander Slusky, founder and managing partner of Vector Capital had told shareholders, adding he wanted to build a bridge between France and the Silicon Valley. Earlier on Wednesday, JPMorgan had amended its offer, going back to the terms of its initial one but raising its price to 1.90 euros per share from 1.60 euros for the reserved capital increase. The proposal was similar in terms of price to the second offer JPMorgan had put forward on June 8 but that had been rejected by Technicolor's board as it added break-up fees as well as another clause effectively excluding any outside bidder. The offer made on Wednesday did not contain these clauses. "This has been a two-year dating process. JPMorgan is not a fast-dater but once we get married, we're here for the long-hold. I want to thank Vector for reminding us that a deal is never done until it is done," said David Walsh, partner at One Equity Partner and representing JPMorgan. Technicolor, which has cut its staff by 6,000 since 2008, has been seeking a partner for its loss-making set-top box business. It is also looking for a buyer for the last remaining factory making the devices in France, which filed for insolvency earlier this month. After posting a net loss of 324 million euros in 2011, the company now aims to reduce its debt -- which stood at 957 million euros at the end of 2011 -- by 200-300 million euros over 2012-2015 as part of its strategic roadmap dubbed Amplify 2015. JPMorgan and Technicolor had appeared ready to seal their initial deal -- which saw JPMorgan offer 1.60 euros a share for the entire 30 percent stake -- when Vector Capital made a higher offer in late May. JPMorgan's second offer however lacked a sufficient legal framework and imposed higher break-up fees, Technicolor said as it turned down the proposal that would have in effect blocked shareholders from voting on Vector Capital's offer. Link this Share this Digg this Email Reprints

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