January 7 EDCI Holdings, Inc. (Nasdaq: EDCI) voted to approve the voluntary dissolution and liquidation of the Company pursuant to a Plan of Complete Liquidation and Dissolution. Approval of the Plan of Dissolution required the affirmative vote of a majority of the outstanding shares of EDCI’s common stock. Stockholders representing approximately 67% of the outstanding shares of EDCI’s common stock voted in favor of the Plan of Dissolution, and of the stockholders voting, over 99% voted in favor of the Plan of Dissolution. ^understood ----------------------- As previously announced by the Company, in connection with the approval of the Plan of Dissolution, the Company’s Board of Directors has approved an initial distribution of cash to its stockholders of up to $30 million. In addition, EDCI is also considering using a portion of the initial distribution of up to $30 million to effect a tender offer in conjunction with the dissolution process. The Board of Directors of EDCI will meet shortly to: a) fix the record date for determining stockholders entitled to participate in the initial distribution b) establish the date for which the stockholders eligible to participate in the initial distribution will be paid and c) determine what portion, if any, of the initial distribution will be used to effect a tender offer. ^ I don’t understand this: “EDCI is also considering using a portion of the initial distribution of up to $30 million to effect a tender offer in conjunction with the dissolution process.” So they are distributing cash to shareholders, but what are they offering for?
One of my holdings! So they’re liquidating and have been in the process for a while. They did a special dividend a few months back to return a chunk of cash to shareholders. What is left is the rest of the cash, some NOLs and a CD business (EDC) in Europe. They were planning on doing a tender offer to cash out shareholders who didn’t want to wait the possible three years to realize value, but that has changed recently. The company was cash flow positive last quarter from it’s European business so they’re looking at all the possibilities at returning value, there’s a good chance the tender is off the table for a while. Let me know if you decide to invest in this.