Deep Field Asset Management LLC Issues Open Letter to OneSpaWorld Shareholders
Believes There is No Question that Better Options Exist Than to Accept Companys Proposed
$75 Million Financing
Re-Calculating Fairness Opinion Using Black-Scholes Pricing Model, Based on Current Stock Price, Reveals that Insider-Driven Transaction Represents 60% DISCOUNT to Market
Challenges Board of Directors to Obtain Updated Fairness Opinion Reflecting Current Market Conditions
Urges Shareholders to Vote AGAINST Dilutive Transaction and Force OSW to Pursue
More Shareholder-Friendly Alternative
BEVERLY HILLS, Ca., June 8, 2020 Deep Field Asset Management LLC (DFAM), a Beverly Hills-based investment adviser of funds that
beneficially own 1,842,487 shares of OneSpaWorld Holdings Limited (NASDAQ: OSW) (the Company), today issued a letter to OSW shareholders regarding the OSWs proposed $75 million financing.
The full text of the letter is below and is available, along with additional communications to shareholders, at www.VoteNoOSW.com.
June 8, 2020
Dear OSW Shareholders,
If a stranger called you tomorrow with an offer to buy 30% of your shares in OSW for $3.00 (a 60% discount to the $7.47 last price), what would you think of
that person? After laughing and hanging up, I might think the person was just being opportunistic. I might even think they had been under such strict quarantine that they had paid no attention at all to markets or the global economy in at least two
months. What I know for sure is that I would quickly hang up the phone, and hope this person would forget my number.
As the saying goes, sometimes fact
is stranger than fiction. At this point, we are not merely being asked by an anonymous stranger to sell our shares at a deeply discounted price. Instead, we are told by OSWs leaders that we must make this sale
or else!
Problematically, we are told this by the very people who are the buyers; and further complicating the matter, those very buyers simultaneously have a legal fiduciary duty to the Company and to us.
Investors must understand that a vote for OneSpaWorlds $75 million transaction is economically equivalent to a value-destructive vote to sell
roughly 30% of your existing shareholdings at a 60% discount to market, mostly to insiders. Contrary to managements position, if you truly wish to protect the value of your holdings, you must vote against
this transaction.
Both leading proxy advisory firms, Glass, Lewis & Co., LLC (Glass Lewis) and Institutional Shareholder
Services Inc. (ISS), in addition to numerous OSW shareholders, have either publicly or privately expressed myriad concerns about the Companys proposed $75 million financing transaction. Even if nothing had changed since it was
originally announced in April, a compelling case has been presented to reject this proposal on process grounds.
But today, with OSW shares trading at
$7.47 and shareholders presented with an insider deal which proposes to buy more than a quarter of the Company for what is now effectively $3.00 per share, a 60% discount to market price, the most important question is this: How could any
reasonable investor doubt that a better financing deal would be readily available to OSW immediately after this flawed one is voted down?
What
Will Shareholders Do?
There is no need to restate all the missteps committed by OSW Leadership against shareholders; those numerous failures can be
found outlined in great detail in reports by Glass Lewis and ISS, as well as our previous letters which can be found at VoteNoOSW.com. What matters now is the imminent June 10th vote.
Over the last month, we have spoken with many of OSWs significant shareholders, as well as countless other market participants. These shareholders have
universally condemned the proposed transaction. It is no exaggeration to say that what happened here shocks people, and that not a single person with whom we have spoken stated any belief that this is a fair deal, fairly negotiated, at a fair price.
Instead, the deal is more often described as a product of blatant greed and opportunism by insiders.