Sphere 3D Corp (ANY)

[donkschmonk]

Here the detailed reasoning why the shorts are in panic mode right now:

With the merger and the following news flow now potentially only two weeks away (start of Q4) and the fact that the proxy specifically states that 65% of Overland shareholders (Cyrus etc) already expressed agreement, while only a simple majority (i.e. 50%) is needed anyway, the shorts now have it on black and white that their "window of opportunity" to get out of their position is closing in at a neckbreaking speed!

Further, as nuggets for those that did not take the time to read the whole proxy (highly detailed and encouraging document), let us just say here that contrary to what the shorts like(d) us to believe, as clearly documented in the proxy, prior and during the merger discussions Overland did have an offer for alternative financing and a term sheet from another lead investor in place, WHICH TRIGGERED SPHERE to make its move and to propose the merger and to convince Overland of it instead of taking such alternative financing! A very nice date by date re-cap is written in the proxy...

Here is why the board of Sphere unanimously voted to propose the merger to Overland, and why in turn the Board of Overland unanimously agreed to proceed with its recommendation it to its shareholders (importantly with Cyrus even agreeing to WAIVE some of the covenants/rights that Cyrus had already obtained before in conjunction with the convertible note they had already issued to Overland, a notable move of support):

Oh, and before I forget: It also says Peter prepared a draft presentation with a financial forecast for the combined entity...I wonder if that made everybody on the boards so excited.

Below all quoted/ directly copy pasted from the proxy:

Recommendations of the Sphere 3D Board of Directors; Sphere 3D’s Reasons for the Merger:

On May 15, 2014, at a meeting of the Sphere 3D board of directors, by unanimous vote, the Sphere 3D board of directors determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable and in the best interests of Sphere 3D and its shareholders. Sphere 3D believes that the combination of these two businesses will benefit shareholders of both Sphere 3D and Overland by creating a strong platform for growth with the following characteristics and synergies:

• The creation of a large and diverse combined company to immediately gain the scale, infrastructure and resources required to become a leading global virtualization company and strengthens Sphere’s ability to service and support partners and customers globally;

• The combination provides greater certainty in leveraging Overland’s existing global distribution network of reseller, integrators and significant Tier One OEM’s, along with Overland’s global manufacturing, delivery and support networks;

• The complementary nature of the respective products brings together next generation technologies for virtualization and cloud computing coupled with end-to-end scalable storage offerings enabling the combined company to address the larger and growing virtualization and cloud markets;

• The additional revenue growth opportunities presented by the expanded product offerings of the combined company allowing Sphere 3D to access the large and diverse customer base of Overland, including government, education and business enterprises worldwide;

• The expected market capitalization, balance sheet and capital structure of the combined company relative to Sphere 3D on a stand-alone basis, including the potential for the combined company to participate in strategic opportunities that otherwise might not be available to Sphere 3D;

• The opportunity for the combined company to retain Overland’s executive management and other key personnel, including Mr. Kelly and Mr. Kalbfleisch, which together with key management of Sphere 3D, including Mr. Tassiopoulos, potentially leading to enhanced financial performance.
Based on the foregoing analysis, Sphere 3D’s board of directors has unanimously determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sphere 3D and its shareholders.


Recommendations of the Overland Board of Directors; Overland’s Reasons for the Merger:

In considering the proposed business combination with Sphere 3D and in making its determination that the merger is advisable and in the best interests of Overland and its shareholders, the Overland board of directors consulted with its management and financial, legal and other advisors, and considered a variety of factors weighing in favor of or relevant to the merger, including the factors discussed below.
Strategic Benefits of the Merger. The Overland board of directors believes that the combination of Overland and Sphere 3D should result in significant strategic benefits to the combined company, which would benefit Overland and its shareholders as shareholders of the combined company. These strategic benefits include the following:

• The creation of a larger and more diversified combined company than Overland currently is alone, including a significantly expanded presence in Canada and a more diversified business in the U.S.;

• The advantages presented by the larger scale and expanded scope of the combined company in meeting the challenges facing the storage industry in light of current and potential future changes in regulatory, financial and economic conditions affecting the industry, including possible industry consolidation;

• The complementary nature of the respective products and geographic markets of Overland and Sphere 3D, and the opportunity created by the transaction to enhance the capabilities of both companies to operate more effectively and efficiently;

• The additional revenue growth opportunities presented by the expanded product offerings of the combined company;

• The expected market capitalization, balance sheet and capital structure of the combined company relative to Overland on a stand-alone basis, including the potential for the combined company to participate in strategic opportunities that otherwise might not be available to Overland;

• The opportunity for the combined company to achieve significant synergy benefits;

• The opportunity for the combined company to retain Sphere 3D’s corporate structure, potentially leading to enhanced financial performance; and

• The opportunity for the combined company to enhance its senior management led by Mr. Kelly and Mr. Tassiopoulos, relative to that of Overland and Sphere 3D separately.


Enough said