Interviews
E Com to merge with retail fragrance company Model
29 Dec '07
3 min read
E Com Ventures Inc announced on December 21, 2007 that it has entered into an Agreement and Plan of Merger with Model Reorg Inc ("Model"), a corporation controlled by the family of Glenn and Stephen Nussdorf, principal shareholders of E Com.
Pursuant to the terms of the Agreement, Model will be merged into a newly formed wholly-owned subsidiary of E Com in exchange for the issuance of 5,900,000 shares of E Com's common stock and warrants to acquire an additional 1,500,000 shares of E Com common stock at an exercise.
The warrants will have a 10-year term, will not be exercisable for the first three years and will not be transferable, with limited exceptions.
The definitive Agreement was reached after extensive negotiations between Model and a special committee comprised of the independent Board members of E Com, which retained independent counsel and financial advisors.
The special committee received an opinion from Financo Inc that, as of the date of the Merger Agreement and subject to various assumptions and qualifications set forth therein, the consideration to be paid by E Com in the merger is fair to the shareholders of E Com (other than shareholders of E Com who own or whose affiliates own securities of Model Reorg) from a financial point of view.
The Merger Agreement contains certain significant modifications from Model's original proposal to E Com. These differences include a reduction of 496,649 in the number of shares of E Com common stock to be issued to the Model shareholders at the closing, the inclusion of a requirement that the Model shareholders indemnify E Com against certain contingent liabilities, the issuance of the warrants, and the elimination of the condition that the transaction be approved by a majority of the disinterested shareholders of E Com.
Pursuant to the terms of the Agreement, Model will be merged into a newly formed wholly-owned subsidiary of E Com in exchange for the issuance of 5,900,000 shares of E Com's common stock and warrants to acquire an additional 1,500,000 shares of E Com common stock at an exercise.
The warrants will have a 10-year term, will not be exercisable for the first three years and will not be transferable, with limited exceptions.
The definitive Agreement was reached after extensive negotiations between Model and a special committee comprised of the independent Board members of E Com, which retained independent counsel and financial advisors.
The special committee received an opinion from Financo Inc that, as of the date of the Merger Agreement and subject to various assumptions and qualifications set forth therein, the consideration to be paid by E Com in the merger is fair to the shareholders of E Com (other than shareholders of E Com who own or whose affiliates own securities of Model Reorg) from a financial point of view.
The Merger Agreement contains certain significant modifications from Model's original proposal to E Com. These differences include a reduction of 496,649 in the number of shares of E Com common stock to be issued to the Model shareholders at the closing, the inclusion of a requirement that the Model shareholders indemnify E Com against certain contingent liabilities, the issuance of the warrants, and the elimination of the condition that the transaction be approved by a majority of the disinterested shareholders of E Com.
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