Maker Studios, the producer of web videos and operator of YouTube channels, will complete its $500 million-plus merger with the Walt Disney Company announced three weeks ago -- despite a last-minute rival offer for Maker from Relativity Media valued at $1.1 billion.
"Relativity's proposal fully values Maker Studios while providing its shareholders far more upside potential for growth than the Disney offer," Relativity wrote in a statement. It continued:
Our offer also includes a substantial opportunity for Maker's talent and employees to directly and significantly participate in the long term growth of Relativity should the transaction be completed. Relativity and Maker Studios are natural partners. We both share a commitment to challenging the status quo, breaking down old models that don't work and inventing new ones that do. We are confident the Maker Studios board and its shareholders will recognize the full value of the Relativity offer.
But on Monday afternoon, a Maker Studios spokeswoman emailed a statement that made clear the company held firmly to its plans to go with Disney:
As per the announcement made on March 24, Maker Studios has entered into a merger agreement with the Walt Disney Company. The agreement has been approved by Maker Studios' board of Directors and the majority of its shareholders and is expected to close in the next few weeks, subject to regulatory approval.
The statement also addressed a lawsuit filed last week by Maker co-founder and ex-CEO Danny Zappin and three other former executives to block a shareholder vote on the deal. Maker said a motion in the case, Katz v. Donovan, was denied Tuesday by the superior court of California; County of Los Angeles, Central District.
“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” said Disney Chairman and CEO Robert A. Iger, in a March 24 statement, with Maker Studios CEO Ynon Kreiz, giving an immediate second.
“Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video,” said Kreiz.
The statement also made clear the value of Maker Studio to Disney or any entertainment company: "With more than 55,000 channels, 380 million subscribers and 5.5 billion views per month on YouTube, Maker has established itself as the top online video network for Millennials," the statement said.
In a March 24 article on the deal in the New York Times, Brent Weinstein, who heads United Talent Agency's digital media division, explained what Disney stood to gain.
“Maker brings to Disney a substantial digital audience, some of the biggest stars in the space and also a real understanding of how to manage big brands on YouTube,” Weinstein told the New York Times. “Look at what Maker has done for Epic Rap Battles and Snoop, and imagine what they can do for Iron Man, Mickey and Yoda.”
Relativity Media responded to today's developments in a statement:
“We made a compelling offer and believe Maker Studios, its employees and its roster of talent would have greatly benefited from Relativity’s platform, its entrepreneurial approach and promising growth potential. We will continue to aggressively explore future opportunities that align with our strategy to accelerate digital content creation and distribution.”