LOS ANGELES, May 16, 2011 /PRNewswire/ -- Baker Street
Capital, L.P. ("Baker Street") announced today that it delivered a
letter to the Board of Directors of Tix Corporation (OTCQX: TIXC).
Baker Street is the largest shareholder of Tix Corporation,
with current ownership of approximately 21.9% of the shares
outstanding. In the letter, Baker Street expressed its
disappointment with the Board's summary rejection of Baker Street's
proposal to acquire all of the shares of common stock of TIX for at
least $2.10 per share in cash. Baker
Street also expressed its concern with the Board's latest actions
to entrench itself, including the unilateral amendment of the
Company's Bylaws to adopt certain defensive measures. Baker Street
expressed its view that shareholders have little faith in the
ability of present leadership to deliver substantial shareholder
value and put the Board on notice that it will be held accountable
for any breaches of its fiduciary duty.
The full text of the letter follows:
Dear Board Members,
We are very disappointed by the Company's latest actions in
response to our proposal to acquire all of the shares of common
stock of TIX not currently owned by Baker Street Capital, L.P. and
its affiliates ("Baker Street") for at least $2.10 per share in cash (the "Proposal").
On April 28, 2011 we met with the
TIX Special Committee's financial advisors B. Riley & Co. None
of the members of the Special Committee attended. At the meeting we
demonstrated our significant financial commitment and our ability
to take the necessary steps to consummate this transaction.
After the meeting we were encouraged to receive a draft
Confidentiality Agreement and looked forward to commencing open and
constructive discussions with TIX. We submitted to B. Riley our
initial comments to the Confidentiality Agreement on May 3, 2011 and made it clear that we were
prepared to quickly commence due diligence.
Unfortunately, we never heard back from the Company or its
advisors. To our dismay, we learned from a self-serving press
release issued by TIX on May 10, 2011
that the Company had rejected our Proposal, stating only that it
was "not in the best interests of Tix or its stockholders." The
press release did not announce any strategic alternatives or value
enhancing plans that TIX believes would yield greater value than
the significant 56.7% premium (over TIX's closing price on
March 30, 2011) offered by our
Proposal. In our March 30 Letter we
called for a special committee to conduct a "robust and full
process." We did not call for a perfunctory meeting with the sole
purpose of allowing the Board to check a box.
In a clear effort to further entrench the Board, the press
release disclosed that Directors had unilaterally adopted
amendments to the Company's Bylaws, making it more difficult for an
already frustrated shareholder base to have its voice heard. The
amended Bylaws include onerous notification provisions stockholders
must now comply with in order to nominate directors and submit
business proposals at future shareholder meetings. We struggle to
understand how such changes are for the benefit of TIX
shareholders. If they were not implemented to benefit shareholders,
whose interests is the Board representing? If the Directors feel
that they are serving shareholders in good faith and have their
support, why is the Board resorting to defensive tactics that make
it more difficult for shareholders to have their fair say?
It appears to us from the actions taken by the Board since the
submission of our Proposal, including the adoption of a poison pill
on April 1, 2011 and now these Bylaws
amendments, that the Board has resorted to legal maneuvers to
insulate itself at the expense of TIX shareholders. As we
communicated to the Special Committee through B. Riley, we believe
that "inaction would be very disappointing for the Company's
shareholders and that we would aggressively oppose the status
quo." Our resolve to do just that has only strengthened as a result
of the Board's obstructive tactics.
It is our view that shareholders have little faith left in the
ability of present leadership to deliver substantial value and
question the Company's corporate governance. We look forward
to the Board's prompt response on how it intends to proceed. It is
our hope that this time the Board will choose to respond to the
Company's largest shareholder with the courtesy of a productive
phone call rather than by way of a press release announcing the
adoption of yet another entrenchment device. We strongly caution
the Board against breaching its fiduciary duty by taking deliberate
actions that impair shareholder value.
Very truly yours,
Vadim Perelman
ABOUT BAKER STREET CAPITAL, L.P.
Baker Street Capital, L.P. is a value-focused investment fund
modeled after the partnerships managed by Warren Buffett from 1956 to 1969. Baker Street
Capital, L.P. is headquartered in Los
Angeles, California.
CONTACT:
Vadim Perelman, 310-246-0345,
vadim@bakerstreetcapital.com
SOURCE Baker Street Capital, L.P.
