Deep Field Asset Management LLC Issues Statement to
OneSpaWorld Shareholders
According to Stifel Report, OSW Management Admitted in Private Meeting that They Have
Identified Alternative Financing Options Thereby Contradicting Managements Prior Statements
Deep Field Demands Management Remedy Selective Disclosure and Make These Alternative Financing
Options Public Prior to Conducting a Vote
BEVERLY HILLS, Ca., June 9, 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 the following statement.
According to a research report published last night by Stifel, in private conversations with several investors on June 8 regarding what would happen if
the proposed financing is voted down, OSW management indicated they have other options to raise liquidity although they may not have enough time to implement those options before tripping their debt covenant at the end of
June.1
This selective disclosure directly contradicts prior written
disclosure by management on its Schedule 14A proxy filings, where the linchpin of managements case defending the $75 million transaction to shareholders has been the insistence that there are no realistic alternatives to the
transaction. The Companys May 26th Investor Presentation states if the proposals are not approved, a viable and timely alternative is unlikely to emerge. Further, in a
June 5th letter to shareholders, Leonard Fluxman wrote without [investor] approval of the equity financing, [OSW] will run out of cash in approximately 75 days.
But Stifel goes on to paraphrase managements message to investors: if they did use their cash on their balance sheet to pay down their revolver
[before June 30], management estimates they would have ~70 days of cash left on the balance sheet and would then just trip their covenant in September. So the June 30 deadline is apparently a ruse; in the very worst case, management says we
can get past June 30, and 70 days gives us until the latter part of August, which is clearly more than enough time to find an attractive and competitive replacement financing.
From our conversations with fellow shareholders, managements purported lack of alternatives is clearly the definitive reason cited as a basis to vote
for this transaction, which makes this question absolutely essential to the entire argument.
We therefore call on OSW management to correct their
selective disclosure immediately and to clarify their prior public statements. Because it now appears that they have acknowledged openly (albeit in private) that they have identified potentially viable alternative options to raise liquidity, OSW
management must publicly state what these options are. There can be no doubt that these options are highly material to OSW shareholders in deciding on how to vote on the highly dilutive insider transaction. Furthermore, the filing by a Board of
proxy statements which conflict with managements selectively disclosed honest assessment of its options may constitute gross negligence.
The
importance of the shareholder vote on OSWs highly dilutive insider transaction cannot be overstated and we continue to urge shareholders to vote AGAINST this deal.
For additional communications from Deep Field, visit www.VoteNoOSW.com.
About Deep Field Asset Management LLC
Deep Field Asset
Management LLC (DFAM) is a privately-held, independent investment adviser with $145 million in assets under management as of May 31, 2020. DFAM manages the Deep Field Opportunities Fund (Fund) a global concentrated
investment fund that invests primarily in the small- and mid-cap space. The Funds objective is to back superior management teams pursuing idiosyncratic, difficult-to-replicate strategies wherein a market position or asset is leveraged to expand share and compound cash flow over a multi-year period. Specifically, the Fund seeks to own
category-defining assets with definitive advantages which we believe are characterized by features such as extraordinary brands, overwhelming market share, data supremacy and easily accessible adjacent opportunities. The Fund was
launched in 2015 by Jordan Moelis, the Funds Portfolio Manager.
IMPORTANT NOTICE: This material is for general informational purposes only and is
not intended to be relied upon as investment advice. The opinions expressed are those of DFAM of June 9, 2020 and are subject to change at any time due to changes in market or economic conditions.
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Stifel Analyst Note, June 8, 2020. Emphasis added.
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