SKUL Skullcandy, Inc. (MM)

“On August 24, 2016, Parent and Purchaser filed a final amendment to the Schedule TO withdrawing the Offer in connection with the termination of the Merger Agreement. No Company Shares were purchased by Purchaser in the Offer.”

“On August 23, 2016, the Company delivered to Parent a written notice terminating the Merger Agreement in accordance with Section 9.3 of the Merger Agreement. In connection with the termination of the Merger Agreement, the Company will pay to Parent the termination fee of $6.6 million required to be paid pursuant to the terms of the Merger Agreement.”

The Company Board, during a meeting held on August 23, 2016, determined (a) to withdraw its recommendation that the stockholders of the Company accept the Offer and tender their Company Shares pursuant to the Offer, and (b) to terminate the Merger Agreement in order to enter into the Mill Road Merger Agreement (as defined in “Item 4. Background and Reasons for the Company Board’s Recommendation”).

Accordingly, the Board does not recommend that the holders of the Company Shares accept the Offer and tender their Company Shares pursuant to the Offer. ”

“On August 23, 2016, Parent notified the Company that Parent did not intend to submit proposed changes to the terms of the Merger Agreement to the Company.

Later that day, the Strategic Transactions Committee met by telephone with management and representatives of PJSC and Latham. Following a summary of developments relating to Parent’s announcement that it would not be submitting a counterproposal to the August 17 Mill Road Proposal, representatives of Latham again reviewed with the Strategic Transactions Committee their fiduciary duties when considering the proposed transaction, and management and representatives of Latham reviewed the terms and conditions of the proposed merger agreement (the “ Mill Road Merger Agreement ”). The Strategic Transactions Committee discussed the terms of the August 17 Mill Road Proposal, including the proposed $0.25 premium relative to the Offer Price, as well as the relative timing of the proposed transactions with Parent and Mill Road, the potential risks associated with a delay in a proposed transaction with Mill Road relative to the current proposed transaction with Parent, the required payment of the $6.6 million termination fee to Parent under the Merger Agreement if the Company were to terminate the Merger Agreement to enter into a Superior Proposal and the terms of the equity and debt commitments presented by Mill Road as part of the August 17 Mill Road Proposal. The Strategic Transactions Committee also noted that Mill Road had indicated that it had obtained approval from its debt financing sources and it had delivered into escrow its signature pages to the proposed merger agreement. A representative of PJSC reviewed PJSC’s financial analysis of the August 17 Mill Road Proposal and then PJSC rendered to the Strategic Transactions Committee an oral opinion, confirmed by delivery of a written opinion dated August 23, 2016, to be delivered to the Company Board to the effect that, as of the date of such written opinion and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion as set forth in such written opinion, the $6.35 per share cash consideration to be paid to the Company’s stockholders (other than as specified in such written opinion) pursuant to the Mill Road Merger Agreement was fair, from a financial point of view, to such stockholders. After further deliberations, the Strategic Transactions Committee recommended that the Company Board adopt resolutions to (a) withdraw the Company Board’s recommendation that the stockholders of the Company accept the Offer and tender their Company Shares pursuant to the Offer, (b) terminate the Merger Agreement in order to enter into the Mill Road Merger Agreement, and pay the $6.6 million termination fee payable to Parent in connection therewith, (c) determine that the transactions contemplated by the Mill Road Merger Agreement are fair to and in the best interests of the Company and its stockholders, (d) approve the Mill Road Merger Agreement and the transactions contemplated thereby and (e) recommend that the stockholders of the Company accept the tender offer contemplated by the Mill Road Merger Agreement and tender their Company Shares pursuant to such tender offer.

Immediately following the meeting of the Strategic Transactions Committee, the Company Board, other than Messrs. Alden, Kearl and Warnock, who continued to recuse themselves, met by telephone with management and representatives of PJSC and Latham to review and discuss the same information covered in the meeting of the Strategic Transactions Committee immediately prior. PJSC delivered to the Company Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated August 23, 2016, to the effect that, as of the date of such written opinion and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion as set forth in such written opinion, the $6.35 per share cash consideration to be paid to the Company’s stockholders (other than as specified in such written opinion) pursuant to the Mill Road Merger Agreement was fair, from a financial point of view, to such stockholders. The Company Board similarly considered the various reasons for and against approving the Mill Road Merger Agreement. The Company Board also considered the recommendations of the Strategic Transactions Committee. After discussions with its financial and legal advisors and members of the Company’s senior management, and in light of the reasons considered, the Company Board, other than Mr. Darling, who recused himself from the vote, resolved to (a) withdraw the Company Board’s recommendation that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer, (b) terminate the Merger Agreement in order to enter into the Mill Road Merger Agreement, and pay the $6.6 million termination fee payable to Parent in connection therewith, (c) determine that the transactions contemplated by the Mill Road Merger Agreement are fair to and in the best interests of the Company and its stockholders, (d) approve the Mill Road Merger Agreement and the transactions contemplated thereby and (e) recommend that the stockholders of the Company accept the tender offer contemplated by the Mill Road Merger Agreement and tender their Company Shares pursuant to such tender offer.

Later that day, the Company delivered a notice of termination of the Merger Agreement to Parent. The parties to the Mill Road Merger Agreement signed the Mill Road Merger Agreement immediately following the termination of the Merger Agreement. On August 24, 2016, the Company and Mill Road issued a joint press release announcing the termination of the Merger Agreement and entry into the Mill Road Merger Agreement. A copy of the press release is attached to this Schedule 14D-9 as Exhibit (a)(22) and is incorporated herein by reference.”

Exhibit No.

Description