Yesterday, investor fund Trinad announced that it had made an offer to buy 2 million shares
of troubled game publisher Majesco for $1.50 each in exchange for the ability to nominate three people for election to Majesco’s board at the company’s 2006 annual meeting.
In addition, the fund called for the resignation of Jessie and Joey Sutton, the sons of Majesco's interim CEO Morris Sutton. Lastly, Trinad indicated that the company intended to file a lawsuit against Majesco and several current and former directors and officers, alleging that they breached their fiduciary duties while managing the business affairs.
Today Majesco issued a response to the investor's offer in the form of an open letter to Trinad Capital Master Fund Ltd. which stated, among other things, that the investment group's intention to purchase approximately 10% of the company's outstanding shares for $3 million was seen as an attempt to acquire control of Majesco.
The letter continued, with Majesco claiming that much of what Trinad had said in its previous statement was false, and even accused the investor of threatening its board members in lieu of of going through an approved interviewing process for representation on the company's board. Majesco also refuted claims by Trinad that it was in a "liquidity crisis”, stating that the company has “sufficient capital resources to meet our capital needs” and if necessary they can “obtain additional financing on terms more favorable than those you have proposed.”
As if more were required, Majesco also called out Trinad's handpicked nominees for the company's board, saying that the individuals' prior involvements with companies linked in one way or another with Majesco would keep them from being independent. They also questioned Trinad's motives, given what they have done in the past with similar ventures.
According to Majesco, Trinad, which previously made an offer
for portions on Majesco in late 2005, has been in the habit of acquiring significant positions in "shell" companies with little or no operations or assets, and then selling off control of those companies to a different management team with different operations. As is obvious by Majesco's response, they are not interested in going this route.
While earlier this month Majesco announced another quarterly loss
, and that it was continuing to shift its focus from premium console games to value and handheld games, the company continues to believe that it can stay profitable without the help of Trinad. Majesco will continue to focus on its software line up for the remainder of 2006 and 2007, according to interim CEO Morris Sutton, as well as “continuing to reduce costs, streamlining our business, and actively seek incremental revenue opportunities related to emerging technologies and peripherals.”