Kaltura board rejects rival’s takeover bid

As expected, the board of directors of Kaltura (Nasdaq: KLTR) has rejected the hostile takeover bid by rival company Panopto, a private company owned by K1 Investment Management, LLC. At the end of last week, Israeli company Kaltura, a developer of video solutions, announced that “after a careful and thorough review conducted in consultation with its independent financial and legal advisors”, the board unanimously decided that Panopto’s bid “significantly undervalues Kaltura and therefore is not in the best interests of shareholders.”

Kaltura develops and sells video management systems for enterprises and media companies. Panopto provides communications software solutions for universities and enterprises for recording lectures, screening video, and so forth.

The takeover bid by Panopto was backed by K1 Investment Management, which holds 6.9% of Kaltura. In late July, Panopto offered to buy all the shares in Kaltura for $3 each, valuing the company at $383 million. The offer represented a 27% premium on Kaltura’s share price at the time, but is 70% below the share price in the company’s IPO in July 2021. On Friday, Kaltura closed at $2.44, giving it a market cap of $320 million.

Kaltura’s announcement of its rejection of Panopto’s bid states, “Kaltura’s Board of Directors is open to all opportunities to maximize shareholder value and is fully committed to acting in the best interests of Kaltura and our shareholders. After careful review and consideration, we concluded that the K1 and Panopto proposal significantly undervalues Kaltura and does not recognize the strength of our business today, nor our compelling future prospects, and as such is not in the best interest of our shareholders.

“We believe strongly in our strategy and our ability to generate substantial long-term value for shareholders, as well as in our outlook for returning to profitable growth, and have recently taken cost-reduction and re-organization measures to accelerate it.” Kaltura recently announced that it was laying off 10% of its workforce, about 80 people, of whom 30 are in Israel, citing the macro-economic situation.

Kaltura’s board is headed by Ron Yekutiel, who founded the company in 2006 together with Dr. Michal Tsur, Dr. Shay David, and Eran Eitam. Yekutiel, who also serves a CEO, holds 6.9% of the company, a stake currently worth $21.7 million.

It will be recalled that after by K1 Investment Management acquired its holding in Kaltura and Panopto indicated its interest in bidding for the company, Kaltura adopted a poison pill strategy to help ward off the bid.

Published by Globes, Israel business news – en.globes.co.il – on September 5, 2022.

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