Urban FT, a software-as-a-service-based digital banking platform, said Tuesday that Digiliti Money Group (DGLT) late Monday rejected Urban’s takeover offer.
Urban FT said that after its initial offer to Digiliti’s board on Aug. 15 and subsequent to initial due diligence revealing Digiliti’s actual financial position, Urban FT submitted a new offer.
The binding term sheet and the accompanying loan instruments valued Digiliti at $10.5 million on a net equity basis. DGLT shares have been halted in trading since Aug. 16, for information requested by Nasdaq. The company’s market capitalization at that time was $10.7 million.
“The offer provided that Urban FT would deliver DGLT and its subsidiary with an immediate line of credit that would enable DGLT to meet all current and ongoing working capital requirements, including its upcoming payroll obligations due at the end of the month,” Urban FT said. “It would also have seen all customer services maintained without service interruption, all remaining employees retained and all creditors receiving 100 cents in the dollar.”
Urban FT said that Digiliti meanwhile had proposed alternate terms, which Urban FT found “unreasonable and unacceptable.” The board of DGLT said DGLT was not willing to negotiate its position and, in an email, noted that “we are too far off at this point” for a deal to be concluded in the timeframe DGLT is working toward.”
“We will leave our offer on the table for acceptance by Digiliti until close of business on Aug. 31,” Urban FT President Kasey Kaplan said. “We ensured that our offer took into consideration all SEC and NASDAQ requirements for a transaction like this, and I hope the Digiliti board concludes that our offer is the most fair, equitable and reasonable option for the various stakeholder groups, whom they–as directors–are meant to adequately and diligently represent as part of their fiduciary duty.”