SkyAI expands cash tender to all warrants after agreement with Bastion
Key Facts
SkyAI announced on October 27 that it had reached an agreement with shareholder Bastion Trading on amendments to its cash tender offer, including expanding the offer to cover all pre-funded warrants and include all associated warrants. Bastion said it would tender all of its securities in the company in the offer. The agreement changes the course of the standoff that preceded the announcement, as Bastion moved from objecting to the offer terms and demanding improvements to committing to participate. SkyAI also announced an extension of the offer period, whose original expiration date was set for October 29, 2026. The revised expiration date and the other precise terms in the new amendment documents could not be verified.
In the original offer documents, SkyAI set the purchase price at $3.00 per share, with a $0.0001 discount to the price for pre-funded warrants and strategic warrants. The maximum aggregate purchase price was $201,260,220, according to offer documents filed with the U.S. Securities and Exchange Commission. The original terms also included caps of 48,311,489 common shares, 4,880,734 cash pre-funded warrants, 9,939,850 crypto pre-funded warrants and 3,955,293 strategic warrants. These figures describe the offer before the October 27 amendments and do not represent the current caps after its expansion. The company said when launching the offer that the purchase was not subject to a financing condition and did not require borrowing.
Before the agreement, Bastion called for the offer price to be raised to at least $3.50 per share or eligible warrant, and estimated net asset value at about $3.30 per share, assuming a SOL price of $110. It presented these estimates on October 14 as the basis for its demand, while the company said at the launch of the offer that the $3 price equaled about 0.95 times net asset value based on cash available on October 16. On October 21, Bastion renewed its call to raise the purchase cap to cover all pre-funded warrants and demanded that strategic warrants be excluded. It also raised questions about the board’s oversight of the liquidation of the SOL treasury and its approval of the offer. Bastion announced on October 21 that it and certain affiliates owned about 9.99% of SkyAI’s outstanding common shares.
The company said it would fund the offer with available cash, and that it had completed the sale of all its SOL holdings and had about $223.8 million in cash on October 16. It added that available cash would cover the value of securities accepted, fees and expenses, without borrowing. SKYA shares closed at $2.89 on October 26, one day before the agreement and amendments were announced. The original offer required at least 50% of the shares tendered to be submitted, tender offers for cash and crypto pre-funded warrants to reach 50% combined, and a separate minimum of 50% for strategic warrants. The terms that will apply after the agreement and the new expiration date remain subject to what is stated in the amendment documents.