Board of Directors of Sleep Cycle advises shareholders to reject Velvet Cichlid's public cash offer, with all independent members in agreement.
Sleep Cycle Receives Takeover Offer, Board Unanimously Recommends Shareholders Reject
In a significant development, Sleep Cycle AB (publ), the leading sleep tracking application, has received a takeover offer from Velvet Cichlid AB. The offer, valued at approximately SEK 861.8 million, was announced on 28 December 2022, at 11:30 CET.
BDO Corporate Finance was engaged to issue an opinion on the financial fairness of the public offer. However, it's important to note that BDO's Fairness Opinion does not cover the relative merits compared to other alternative business opportunities of Sleep Cycle or alternative investment opportunities of the shareholders of Sleep Cycle.
The offer stands at SEK 42.50 in cash for each share in Sleep Cycle. Despite BDO Corporate Finance's opinion that the offer is not financially fair to Sleep Cycle's shareholders, the Board of Directors has conducted a thorough assessment and, following this overall evaluation, the Board is of the opinion that the offer does not reflect Sleep Cycle's growth potential and fundamental value. Consequently, the Board unanimously recommends Sleep Cycle's shareholders to not accept the offer.
The Consortium, which controls Velvet Cichlid AB, holds approximately 68.2% of the shares in Sleep Cycles AB (publ). The Board of Directors has appointed SEB Corporate Finance as financial advisor and Mannheimer Swartling as legal advisor in relation to the offer.
It's worth noting that the Chairman of the Board, Lars Berg, has due to conflict of interest not participated in the Board's handling of or decisions related to the Offer.
The offer represents a premium of 37.3% compared to the volume-weighted average share price of Sleep Cycle's share during the last 30 trading days prior to the announcement of the offer. It also represents a premium of 33.6% compared to the closing price of Sleep Cycle's share on 16 December 2022. However, it's important to mention that the offer represents a discount of 39.3% compared to the Initial Public Offering (IPO) price of Sleep Cycle's shares on 8 June 2021.
Since its launch in 2009, Sleep Cycle has helped millions of people understand their sleep habits and improve their sleep. The mission of Sleep Cycle AB (publ) is to improve global health by empowering people to sleep better. The company is obliged to make public the information pursuant to the EU Market Abuse Regulation and the Takeover Rules.
For the most accurate and up-to-date information on this topic, it would be necessary to consult official press releases from Sleep Cycle, statements from Velvet Cichlid AB, financial news outlets, or regulatory filings related to the takeover offer.
Investors may want to consider the ongoing takeover offer for Sleep Cycle, given that it represents a premium compared to the share price over the past 30 trading days. However, the Board of Directors unanimously recommends shareholders to reject the offer due to concerns about its reflection of Sleep Cycle's growth potential and fundamental value in the broader finance and business landscape, including the stock-market.
