There’s some drama enjoying out across the cap desk of Reservoir Media – the Nasdaq-listed music rights firm.
Irenic Capital, which owns round 8% of Reservoir, has issued an announcement at present (September 30) outlining its intentions as an activist shareholder of the corporate.
That assertion reads: “On September 30, 2024, Irenic Capital Administration LP believed that the securities of [Reservoir] are considerably undervalued and inspired the Firm to undertake a full strategic evaluation of all options to maximise shareholder worth and to kind a particular committee of the Board to supervise such evaluation course of.
“As well as, Irenic Capital acknowledged that it could take into account, discover and/or develop plans and/or make proposals with respect to, amongst different issues, the issues set forth.”
To summarise: Irenic is demanding a strategic evaluation of Reservoir, and threatening that it’s going to subject its personal proposals to shareholders if such a evaluation will not be undertaken.
In response to Irenic Capital’s assertion, a Reservoir spokesperson advised MBW: “The Reservoir Media Board of Administrators values shareholder enter and we stay targeted on executing our technique to drive worth, in keeping with our fiduciary responsibility to all shareholders.”
(MBW’s learn on that assertion: the reference to concentrate on “executing our technique” – versus anybody else’s technique – might counsel that Reservoir’s administration is up to now comparatively unruffled by Irenic’s calls for.)
On the time this story was revealed, Reservoir Media’s share value at present sits at USD $7.79 on the Nasdaq, representing a market cap of roughly $504 million.
That share value is up roughly 10% year-to-date, and up 30.5% YoY (see under), in line with Google Finance.
Understanding Reservoir’s possession construction helps one perceive the problem Irenic Capital has offered to its board.
In accordance with the newest related SEC filings, Irenic Capital owns 5.299 million shares in Reservoir, representing 8.1% of the corporate.
That possession stake is dwarfed by that of Wesbild Inc, which owns greater than 28.5 million shares in Reservoir, representing roughly 44% of the corporate’s fairness.
Wesbild Inc, run by Chairman, Hassan Khosrowshahi, is a subsidiary of Persis Holdings Ltd, which represents the funding pursuits of the Khosrowshahi household.
Golnar Khosrowshahi is the founder and CEO of Reservoir. Since establishing Reservoir in 2007, she has steered the corporate to symbolize over 150,000 copyrights and 36,000 grasp recordings.
The corporate generated USD $144.9 million in annual revenues within the 12 months to finish of March 2024, its fiscal yr. That determine was up 14% YoY organically, or 18% YoY together with acquisitions.
Different institutional shareholders in Reservoir embody Richmond Hill Investments Inc – through ER Reservoir LLC – which owns 13.64 million shares, in line with SEC filings. That equates to roughly 21% of Reservoir’s fairness.
Elsewhere, corporations equivalent to BlackRock personal single-digit institutional stakes in Reservoir.
Manhattan-headquartered Irenic Capital was based by Adam Katz and Andy Dodge.
Katz is a former Affiliate Portfolio Supervisor at Elliott Administration; Dodge beforehand served as an Funding Accomplice at Indaba Capital Administration.
In accordance with Irenic’s web site: “Irenic invests in public corporations and works collaboratively with agency management. Our aim is to provide enhancements in working and monetary efficiency that create long-term worth for the corporate and its house owners.”Music Enterprise Worldwide
