Baker Street Capital Sends Letter to Tix Corp. (TIXC) Board; Feels $2.10/Share Offering Should Be Evaluated
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Baker Street Capital, L.P. sent the following letter to Tix Corp.'s (OTCBB: TIXC) Board of Directors.
"Dear Independent Board Members,
As you know, Baker Street Capital, L.P., together with its affiliates, is the largest shareholder of Tix Corporation, owning 5,451,259 shares or approximately 21.9% of the Company's 24,856,893 outstanding shares of common stock.
Five days ago we submitted to you a letter, a copy of which is attached, which expressed our deep concern that senior management might be in the process of exploring an acquisition of the Company at less than full value. To protect our significant investment in the Company and based upon our belief in the Company's long-term prospects our letter also included a non-binding offer, subject to certain conditions, to acquire all of the shares of common stock of TIX not currently owned by Baker Street for a minimum of $2.10 per share in cash. The Purchase Price represented a premium of approximately 56.7% over TIX's closing price of $1.34 on March 30, 2011.
The March 30 Letter invited the Company to conduct a robust, full and fair sales process. We believe it is incumbent upon the Board to immediately create a special committee of independent directors to explore all strategic alternatives. This step would also reduce concerns arising from the inherent conflict of interest in Mitchell Francis, the Company's Chairman and CEO, exploring a management-led buyout. We are adamant that any action which the Board endorses must allow for the realization by shareholders of the Company's substantial intrinsic value.
We were very disappointed that the Company's response to our non-binding proposal was to adopt a shareholder rights plan (or poison pill) without offering any explanation to shareholders and without disclosing either our offer or any actions the Company may have taken to assist Mr. Francis in exploring a potential acquisition of the Company. The adoption of the shareholder rights plan appears to be but the latest in a series of events undertaken by this Board of Directors to insulate itself from accountability to the Company's shareholders.
It was our strong preference to continue to communicate privately with the Company to agree on a course of action in the best interest of all shareholders, but we feel compelled that all shareholders should understand the context of our proposal. Accordingly, we are issuing a press release regarding this letter and the March 30 Letter. We remind you that, as Board Members of a publicly traded Delaware corporation, it is your fiduciary responsibility to represent the best interests of all shareholders and we urge shareholders not to stand idly by if the Board, either through inaction, cronyism or neglect, fails to act in their best interest. As Warren Buffett said in his 2003 Annual Letter to Shareholders, "fiduciaries must now decide whether their job is to work for owners or for managers." We stand ready to meet with an independent committee of the Board to discuss our proposal and the other matters outlined herein.
Very truly yours,
Vadim Perelman"
"Dear Independent Board Members,
As you know, Baker Street Capital, L.P., together with its affiliates, is the largest shareholder of Tix Corporation, owning 5,451,259 shares or approximately 21.9% of the Company's 24,856,893 outstanding shares of common stock.
Five days ago we submitted to you a letter, a copy of which is attached, which expressed our deep concern that senior management might be in the process of exploring an acquisition of the Company at less than full value. To protect our significant investment in the Company and based upon our belief in the Company's long-term prospects our letter also included a non-binding offer, subject to certain conditions, to acquire all of the shares of common stock of TIX not currently owned by Baker Street for a minimum of $2.10 per share in cash. The Purchase Price represented a premium of approximately 56.7% over TIX's closing price of $1.34 on March 30, 2011.
The March 30 Letter invited the Company to conduct a robust, full and fair sales process. We believe it is incumbent upon the Board to immediately create a special committee of independent directors to explore all strategic alternatives. This step would also reduce concerns arising from the inherent conflict of interest in Mitchell Francis, the Company's Chairman and CEO, exploring a management-led buyout. We are adamant that any action which the Board endorses must allow for the realization by shareholders of the Company's substantial intrinsic value.
We were very disappointed that the Company's response to our non-binding proposal was to adopt a shareholder rights plan (or poison pill) without offering any explanation to shareholders and without disclosing either our offer or any actions the Company may have taken to assist Mr. Francis in exploring a potential acquisition of the Company. The adoption of the shareholder rights plan appears to be but the latest in a series of events undertaken by this Board of Directors to insulate itself from accountability to the Company's shareholders.
It was our strong preference to continue to communicate privately with the Company to agree on a course of action in the best interest of all shareholders, but we feel compelled that all shareholders should understand the context of our proposal. Accordingly, we are issuing a press release regarding this letter and the March 30 Letter. We remind you that, as Board Members of a publicly traded Delaware corporation, it is your fiduciary responsibility to represent the best interests of all shareholders and we urge shareholders not to stand idly by if the Board, either through inaction, cronyism or neglect, fails to act in their best interest. As Warren Buffett said in his 2003 Annual Letter to Shareholders, "fiduciaries must now decide whether their job is to work for owners or for managers." We stand ready to meet with an independent committee of the Board to discuss our proposal and the other matters outlined herein.
Very truly yours,
Vadim Perelman"
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