Guernsey's stand to lose up to 4% of sale price if deal is not closed by June 11th
Titanic Artifact Sale Transaction Costs The Company is party to a Consignment Agreement with Guernsey’s auction house to sell the Company’s Titanic artifacts and related intellectual property. If and when a transaction is closed, the Company will be required to pay Guernsey’s a fee of up to 8% of the sale price if a purchase agreement is entered into within 60 days of the auction deadline, and up to 4% of the sale price if a purchase agreement is entered into thereafter. The actual amount of the commission will depend on the sale price, identity of the purchasing party and the date when the sale is closed. In addition, if and when a transaction to sell the Titanic artifact collection is closed, the Company may be required to pay a Transaction Bonus to Christopher Davino, former President of RMS Titanic, Inc., dependent upon the sale price, identity of the purchasing party and the date when the sale is closed. If a Transaction Bonus is paid to Mr. Davino, it is expected to be in the range of $625 thousand to $5.25 million, as previously disclosed by the Company. I think Guernsey's and Mr. Davino stand to lose alot here. Guernsey's Will lose 4% of the sale price if it's not done soon. Mr. Davino Millions if not sold at least the appraised value. But I guess they all have enough money and don't care right?
Id be very surprised if they can stiff the auction company out of 4% if they sell to a buyer the auction company introduced them to.
I had no idea that Davino had so much to gain.
Anyone have the EXACT details of his "deal" ?
I read the conference call last night and my view is they were telegraphing they are aware of the appraisal value but that figure is a pipedream. But, they will keep using that to try to get the bidders to pay more.
Davino's exact formula is redacted, but it looks like the low end of the bonus is 1.25% of sale proceeds. The range is redacted, so it is unclear if he gets that in any sale, or if that first percentage only applies above some minimum level. It then escalates to higher percentages at higher deal prices. See 3(d) here: http://sec.gov/Archives/edgar/data/796764/000095012311101204/c25374exv10w1.htm
As for the conference call, I read the reference to the appraisal value as one that was meant for the bidders. Ie bidders are well below appraisal, and they are trying to push them towards it. So I think it does tend to confirm that number remains a stretch and current bids are below. But, to be honest, it was vaguely more positive than I expected.
As you said before, there is a little upside, and probably more limited downside, but quite frankly a price in the low to mid $2 seems fairly reasonable.