Jones Soda Receives a Buyout Offer: 55% Off Its Current Price

Posted Dec 22nd 2009 10:00AM by Zac Bissonnette
Filed under: Deals

Jones Soda (JSDA) has received a buyout offer from Big Red Holdings Corporation, the parent company of Big Red Inc.

Normally that would be fantastic news, but this offer is unusual: The bid names a price of 30 cents per share, which represents a discount of 55% from the stock's closing price of 66 cents per share on Monday. The deal would value the company at just $7.95 million -- a far cry from its peak market cap of over $500 million, a level it reached in the first half of 2007. The offer also represents a huge discount from the company's shareholder equity of $14.4 million at the end of the third quarter -- and that included more than $6 million in cash.

The problem is that the company's balance sheet may not be strong enough to absorb the losses the company is racking up, which could push the company into the arms of a larger firm.

In a press release announcing the receipt of the offer, CEO Joth Ricci noted that "adverse economic conditions have continued to negatively impact our liquidity and financial condition and caused us to explore strategic alternatives in an effort to enhance shareholder value." He said that the company will continue to evaluate its options, including the Big Red offer.

On the message boards, shareholders are reacting the way you might expect them to react to an offer that represents a 55% discount. "Tell them to stick their offer where the sun doesn't shine. I will not tender my shares for that piddling amount! I will remain an annoying minority share holder," wrote one Yahoo! message board poster.

But the Big Red offer could put the company in play, and may attract other offers now that the company is "in play."

Tags: inthenews, Jones Soda, JonesSoda, JSDA