April 15, 2014
Maker Studios announced that Disney’s offer to acquire the YouTube multichannel network (MCN) has been approved by a majority of its shareholders, despite Relativity Media throwing its hat in the ring with a surprise bid of $1.1 billion (mostly stock) on Sunday. Also, the Superior Court for the State of California in L.A. yesterday rejected a request by former Maker executives, including former CEO Danny Zappin, seeking to block the shareholder vote on the proposed Disney acquisition.
“Zappin and the others last summer sued Maker Studios, alleging breach of contract and fraud over Zappin’s ‘ousting’ as chief executive and that Maker Studios board members and officers ‘illegally issued shares to themselves and diluted the common stock for their own financial gain to the detriment of other Maker shareholders and take control Makers’ board,'” reports Variety. “The court on Monday denied the plaintiffs’ request for a temporary restraining order, which sought to halt the Maker shareholder vote on Disney pending the disclosure of ‘material’ information about the prior lawsuit.”
“Disney agreed to buy Maker on March 24 for $500 million in cash, a price that could rise to $950 million if Maker hits certain performance milestones,” according to Reuters.
“As per the announcement made on March 24, Maker Studios has entered into a merger agreement with The Walt Disney Co.,” a spokeswoman for Maker said. “The agreement has been approved by Maker Studios’ board of directors and the majority of its shareholders and is expected to close in the next few weeks, subject to regulatory approval.”
“We made a compelling offer and believe Maker Studios, its employees and its roster of talent would have greatly benefited from Relativity’s platform, its entrepreneurial approach and promising growth potential,” said Relativity EVP David Shane in a statement. “We will continue to aggressively explore future opportunities that align with our strategy to accelerate digital content creation and distribution.”
Content producers are looking to attract the millennial demographic with short form online video. “Hollywood studios are eager to tap into MCNs to reach younger audiences,” notes Variety, “and they also see potential for developing TV shows and movies based on digital entertainment properties.”
Maker Studios currently claims 380 million subscribers and more than 5.5 billion monthly video views.