Board of Directors of Sleep Cycle advises shareholders to reject the public buying proposal from Velvet Cichlid
Gothenburg, Sweden - Sleep Cycle, the popular sleep tracking app company based in Gothenburg, has found itself at the centre of a financial battle, with its Board of Directors rejecting a takeover offer from Velvet Cichlid AB.
Sleep Cycle, listed on Nasdaq Stockholm under the ticker SLEEP, has a mission to improve global health by empowering people to sleep better. The company's mobile application, with millions of daily active users and over two billion nights analysed in more than 150 countries, helps users fall asleep more easily, tracks and analyses sleep during the night, wakes the user in a light sleep phase, and provides insight into how sleep quality can be improved.
The Board of Directors of Sleep Cycles AB (publ) has made a statement that the public takeover offer by Velvet Cichlid AB does not reflect Sleep Cycle's growth potential and fundamental value. BDO Corporate Finance, engaged by the Board, has provided a financial analysis and opinion regarding the offer. According to their assessment, the offer price of SEK 45 per share in cash is fair and acceptable from a financial point of view to the Sleep Cycle shareholders.
However, the Board unanimously recommends Sleep Cycle's shareholders to not accept the offer. BDO's opinion, based on the analyses, assumptions, and subject to the foregoing, is that the offer is not fair from a financial point of view for the shareholders of Sleep Cycle.
The Bidder and the Consortium together hold 70.0% of the shares in Sleep Cycle, with additional shareholders holding approximately 7.0% declaring they are positive to the offer. The Consortium, which controls Velvet Cichlid AB, holds approximately 68.2% of the shares in Sleep Cycle and has acquired 1.8% since the announcement of the offer.
The Offer, announced on 19 December 2022, is for SEK 42.50 in cash for each share in Sleep Cycle and is valued at approximately SEK 861.8 million. The offer represents a premium of 33.6% compared to the closing price on 16 December 2022, but a discount of 39.3% compared to the Initial Public Offering price.
The Board believes that Sleep Cycle has performed broadly in line with market expectations since the IPO and continues to develop in line with its strategy. Sleep Cycle is one of the world's most comprehensive sources for statistics on sleep and contributes to research and reporting on sleep worldwide.
The Board has appointed SEB Corporate Finance as financial advisor and Mannheimer Swartling as legal advisor in relation to the Offer. The Chairman of the Board, Lars Berg, has due to conflict of interest not participated in the Board's handling of or decisions related to the Offer.
This opinion is typically included to help shareholders make an informed decision regarding the takeover bid. The statement is governed by and construed in accordance with substantive Swedish law, and any dispute arising out of or in connection with this statement shall be settled exclusively by Swedish courts.
- Despite BDO Corporate Finance's financial analysis determining that the offer price of SEK 45 per share in cash is fair from a financial perspective, the Board of Directors of Sleep Cycles AB (publ) recommends against accepting the takeover offer from Velvet Cichlid AB, indicating a belief in the company's future growth potential in real-estate, finance, business, and personal-finance sectors.
- As Sleep Cycle continues to dominate as a comprehensive source for sleep statistics and contributes significantly to global sleep research, the Board has decided to seek advice from SEB Corporate Finance for financial matters and Mannheimer Swartling for legal matters regarding the takeover bid, aiming to ensure the company's continued development in the fields of business, investing, and personal-finance.
