Motorola Inc.’s aggressive move to control Next Level Communications Inc. is moving forward. The company announced today that it has successfully completed its cash tender offer of $1.18 per share for all outstanding shares of common stock of Next Level Communications and its intention to acquire the remaining ownership of Next Level through a short-form merger.
“Incorporating Next Level’s high speed data, video and voice products into our broader suite of telecom solutions continues Motorola’s rich heritage of providing innovative ways to enhance and differentiate our customers’ business models,” said Christopher B. Galvin, chairman and CEO of Motorola.
Geoff Burke, director of marketing services at Next Level, says Motorola brings to Next Level "the resources of a global giant” with set-top boxes and wireless technology that could potentially be leveraged along with the Next Level DSL video platform. He adds that last week Next Level reported its revenues were up 40 percent last year and last quarter.In February Motorola made an unsolicited tender offer to acquire all outstanding shares of Next Level stock it didn’t already hold. But Next Level responded that Motorola’s offer to pay $1.04 each for the outstanding Next Level shares were “inadequate” and said that “the process Motorola is using to squeeze out the minority stockholders is unfair.” Motorola later revised its offer to $1.18 per share, which the company says represents a 25.5 percent premium over the Next Level stock's closing price on March 21, 2003, the last trading day prior to the announcement of Motorola’s 13.5 percent increase in its offer price. The $1.18 per share price also represents premiums of 29.8 percent more than the stock’s closing price on Jan. 10, 2003, the date prior to the announcement of the tender offer.
Burke says although the dealings between Motorola and Next Level were "somewhat contentious" at first, the Next Level board was happy with the second offer.The offer and withdrawal rights expired at 5 p.m. EDT on Friday, April 11, 2003. According to the report of the depositary for the tender offer, 13,306,988 million shares of Next Level common stock have been tendered and not withdrawn (including 706,145 shares of common stock subject to guaranteed delivery). As a result of the tender offer, Motorola will own approximately 88.7 percent of Next Level’s outstanding common stock.
Motorola intends to acquire the remaining ownership of Next Level not owned by Motorola as a result of the tender offer through a short-form merger pursuant to which Next Level’s remaining shareholders (other than Motorola, its subsidiaries and shareholders properly exercising dissenters’ rights) will be entitled to receive $1.18 per share in cash, without interest. Such a short-form merger does not require the approval of or prior notice to Next Level’s board or other stockholders. Motorola intends to convert certain shares of Next Level preferred stock to shares of Next Level common stock to achieve the 90 percent ownership threshold required to effect the short-form merger under Delaware law.
Once Motorola completes the short-form merger, Next Level’s shares will no longer be listed on the Nasdaq National Market and Next Level shareholders (other than Motorola or its subsidiaries) will have no further rights as shareholders other than the right to receive $1.18 per share in cash or to exercise dissenters’ rights pursuant to Delaware law.
