Board of Directors of Sleep Cycle encourages shareholders to reject the public money offer by Velvet Cichlid.
In a significant development, Sleep Cycle AB (publ) has received a public takeover offer from Velvet Cichlid AB. The offer, valued at SEK 861.8 million, has been met with scrutiny, with BDO Corporate Finance, acting as an independent expert, providing a financial fairness opinion that questions the offer's fairness to Sleep Cycle's shareholders.
As an independent expert, BDO Corporate Finance conducts a thorough and impartial valuation of Sleep Cycle AB (publ) shares. Their analysis provides an objective benchmark against which the offer price can be compared.
The opinion evaluates whether the offer price proposed by Velvet Cichlid AB is fair from a financial perspective to the shareholders of Sleep Cycle AB. This includes considering the market value, recent trading prices, financial metrics, and other relevant factors.
The independent expert's assessment helps ensure that shareholders receive a fair price for their shares, protecting their interests and preventing undervaluation.
Many jurisdictions require or recommend an independent expert’s fairness opinion in public takeover offers to enhance transparency and credibility. BDO’s involvement adds confidence that the offer has been reviewed rigorously.
However, BDO Corporate Finance has provided an opinion according to which the offer is not fair to Sleep Cycle's shareholders from a financial point of view. This opinion is based on established valuation methods and is subject to certain assumptions and conditions.
It's important to note that the offer price represents a discount of 39.3% compared to the Initial Public Offering (IPO) price of SEK 70.0 for Sleep Cycle's shares on 8 June 2021. The Board, which includes independent members, has stated that the offer does not reflect Sleep Cycle's growth potential and fundamental value.
The Board, led by Chairman Lars Berg who has recused himself due to a conflict of interest, has recommended Sleep Cycle's shareholders to not accept the offer. The Board has appointed SEB Corporate Finance as financial advisor and Mannheimer Swartling as legal advisor in relation to the offer.
Disputes arising from this statement shall be settled exclusively by Swedish courts. Shareholders are advised to carefully consider the information provided by BDO and the recommendations from the Board before making a decision regarding the offer.
The financial fairness opinion provided by BDO Corporate Finance, as an independent expert, indicates that the offer price proposed by Velvet Cichlid AB does not seem fair to the shareholders of Sleep Cycle AB from a financial perspective. This opinion is based on established valuation methods and is subject to certain assumptions and conditions, raising questions about the fairness of the investment opportunity in Sleep Cycle's business.
The Blackstone Group's involvement, acting as financial advisor to Velvet Cichlid AB, adds another layer of complexity to the financial aspect of the takeover offer, further necessitating a thorough evaluation and careful considerations by Sleep Cycle's shareholders before deciding on investing in this business deal.
