XLMedia decided to pursue this course of action after divesting all of its European and North American assets, transforming the company into a cash shell entity
XLMedia PLC, a digital media affiliate company listed on the Alternative Investment Market (AIM), plans to start a £16 million ($20.2 million) tender offer in early 2025. This move is part of its plan to close down operations and give value back to shareholders.
XLMedia Evolves into Cash Shell Entity Post Asset Sales
XLMedia made this choice after selling almost all its European and North American assets. This sale has turned the company into a cash shell entity under AIM Rule 15. The tender offer makes up about half of the company’s current market value. It also represents a big part of the total cash expected to remain after paying off debts.
The company sold assets in April and November 2024 bringing in $20 million by November’s end. They expect Gambling.com Group to pay another $7.5 million in April 2025. On top of that, the company could get up to $5 million more based on how well the sold assets perform. However, they think it is more likely to be between $3 and $4 million. The real numbers will be known by early 2025.
XLMedia is getting ready to deal with big costs as it shuts down. The company thinks these costs will be between $11 million and $13 million. This money will go to several things: paying off workers the company is letting go of, taking care of taxes, paying guaranteed minimums it owes, and covering the costs of helping new owners take over its operations.
XLMedia Board Focuses on Employee Compensation and Maximizing Shareholder Returns
A big chunk of the costs will be used to pay employees who are losing their jobs, as the company cuts down on staff to close up shop. It will not know the exact tax bill until it finishes its 2024 tax papers and figures out how much money it got from selling its assets.
XLMedia has confirmed it will not try to do a reverse takeover or become an investing company as it turns into a cash shell. The board’s main job now is to manage a smooth wind-down and get the best returns for shareholders. The company is also looking at how the board is set up to make sure they can run things well in the company’s final stages.
Marcus Rich, an independent non-executive chair, said the board aims to strike a balance between closing the business and providing value to shareholders. The choice to end operations shows the final stage of XLMedia’s restructuring efforts over the years. It also points out the hurdles digital media affiliates face in a tough and changing market. As the company approaches its end, it stays committed to meeting its duties and giving out the leftover money to shareholders.
