Leading gaming accessory maker Turtle Beach Corporation (Nasdaq:
HEAR) (“Turtle Beach” or the “Company”), today issued the following
response on behalf of its Board of Directors (the “Board”) to
misleading statements by The Donerail Group (“Donerail”):
The Board is committed to acting in the best interests of the
Company and its shareholders to maximize long-term value.
Consistent with this commitment, members of the Board and
management team have held numerous discussions with Donerail over
the past several months to hear its views with respect to the
Company.
On August 19, Donerail stated in a press release that the Board
rejected its proposal to acquire the Company. The Company does not
normally comment on private communications with individual
shareholders, but believes this response is necessary to address
Donerail’s false statements and provide its shareholders accurate
information about Donerail’s proposal. Donerail’s acquisition
proposal by its terms remains preliminary, highly contingent,
subject to due diligence and financing, and is therefore not
binding. Nonetheless, at the Company’s instruction, its financial
advisor Bank of America sought to engage with Donerail
constructively over the past few months so that Turtle Beach could
review its acquisition proposal in greater detail. The Company also
conveyed to Donerail that the Board had concerns regarding
Donerail’s ability to consummate a transaction and its financing
sources, and that it did not view Donerail’s proposed acquisition
price to be sufficient. Still, the Company was willing to continue
to evaluate the proposal in an effort to achieve a higher offer
price.
In fact, on August 9, 2021, the Company communicated to Donerail
via a letter that:
“Notwithstanding the foregoing, we remain
open to continuing discussions about your acquisition proposal.
Bank of America has not yet received the list of diligence items
you agreed to provide that you stated were necessary to
significantly increase your offer. Also, in order to facilitate
substantive discussions about your proposal, we must have in place
a mutually acceptable NDA. As such, we have instructed Bank of
America to request the diligence items from you again as well as a
markup of the NDA if you remain interested in continuing
discussions about your proposal.”
The full letter will be made available with the Company’s Form
8-K filing on the SEC website here.
Donerail has since refused to further engage with Bank of
America on a customary NDA (non-disclosure agreement), even though
Donerail’s acquisition proposal explicitly requested an NDA.
Donerail has also refused to provide a list of diligence items that
it had informed Bank of America it would need from Turtle Beach in
order to significantly increase its offer despite repeated
outreach. In order to better assess the credibility of Donerail’s
proposal, the Company, through its financial advisor, has
repeatedly requested information about Donerail’s ability to fully
finance an acquisition in light of Donerail’s lack of acquisition
track record. The Company has not yet received satisfactory
evidence of Donerail’s financing sources.
Donerail’s behavior is not consistent with market practice or
the actions of a credible, legitimate buyer truly interested in, or
capable of, effecting an acquisition of the Company. By refusing to
cooperate, Donerail has limited the Company and the Board’s ability
to fully assess its proposal and its credibility.
Turtle Beach has constructively engaged with Donerail as it
would with any other party that wishes to discuss a potential
transaction with the Company. It is unfortunate that Donerail has
thus far refused to reciprocate numerous engagement overtures by
the Company about its proposal and instead has chosen to send the
Board letters and issue press releases with misleading and false
information.
Consistent with their fiduciary duties, the Company and the
Board remain open to further engagement on Donerail’s acquisition
proposal under proper processes and conditions when Donerail is
able to adequately demonstrate its ability to credibly support and
finance an offer at a price that is fair to the Company’s
shareholders.
About Turtle Beach Corporation
Turtle Beach Corporation (https://corp.turtlebeach.com) is one
of the world’s leading gaming accessory providers. The Turtle Beach
brand (www.turtlebeach.com) is known for pioneering first-to-market
features and patented innovations in high-quality, comfort-driven
headsets for all levels of gamer, making it a fan-favorite brand
and the market leader in console gaming audio for the last decade.
Turtle Beach’s ROCCAT brand (www.roccat.org) combines detail-loving
German innovation with a genuine passion for designing the best PC
gaming products. Under the ROCCAT brand, Turtle Beach creates
award-winning keyboards, mice, headsets, mousepads, and other PC
accessories. Turtle Beach’s Neat Microphones brand
(www.neatmic.com) creates high-quality USB and analog microphones
for gamers, streamers, and professionals that embrace cutting-edge
technology and design. Turtle Beach’s shares are traded on the
Nasdaq Exchange under the symbol: HEAR.
Cautionary Note on Forward-Looking Statements
This press release includes forward-looking information and
statements within the meaning of the federal securities laws.
Except for historical information contained in this release,
statements in this release may constitute forward-looking
statements regarding assumptions, projections, expectations,
targets, intentions or beliefs about future events. Statements
containing the words “may”, “could”, “would”, “should”, “believe”,
“expect”, “anticipate”, “plan”, “estimate”, “target”, “goal”,
“project”, “intend” and similar expressions, or the negatives
thereof, constitute forward-looking statements. Forward-looking
statements involve known and unknown risks and uncertainties, which
could cause actual results to differ materially from those
contained in any forward-looking statement. Forward-looking
statements are based on management’s current belief and
expectations, as well as assumptions made by, and information
currently available to, management.
While the Company believes that its expectations are based upon
reasonable assumptions, there can be no assurances that its goals
and strategy will be realized. Numerous factors, including risks
and uncertainties, may affect actual results and may cause results
to differ materially from those expressed in forward-looking
statements made by the Company or on its behalf. Some of these
factors include, but are not limited to, risks related to, the
substantial uncertainties inherent in the acceptance of existing
and future products, the difficulty of commercializing and
protecting new technology, the impact of competitive products and
pricing, general business and economic conditions, risks associated
with the expansion of our business including the integration of any
businesses we acquire and the integration of such businesses within
our internal control over financial reporting and operations, our
indebtedness, the Company’s liquidity, and other factors discussed
in our public filings, including the risk factors included in the
Company’s most recent Annual Report on Form 10-K, Quarterly Report
on Form 10-Q, and the Company’s other periodic reports. Except as
required by applicable law, including the securities laws of the
United States and the rules and regulations of the Securities and
Exchange Commission, the Company is under no obligation to publicly
update or revise any forward-looking statement after the date of
this release whether as a result of new information, future
developments or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210823005188/en/
For Investor Information, Contact: Cody Slach or Alex
Thompson Gateway Investor Relations On Behalf of Turtle Beach
949.574.3860 HEAR@gatewayir.com
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