April 14 (Bloomberg) -- Relativity Media, producer of “The Social Network,” made a $1.1 billion offer for YouTube video supplier Maker Studios Inc., a person with knowledge of the matter said, countering Walt Disney Co.’s $950 million bid.
Relativity, the studio led by Ryan Kavanaugh, sent a letter to Maker Studios’ board today detailing its bid, said the person, who wasn’t authorized to speak publicly and requested anonymity. Terms include $525 million in cash and Relativity stock, $500 million more in cash and stock if performance targets are met, and $75 million in shares for key Maker executives, said the person,
The last-minute proposal may lead to a protracted battle for Maker, a supplier of video content to YouTube and one of the top online networks for young audiences. The deal is further complicated by a lawsuit filed by Danny Zappin, a former chief executive of Maker Studios, and three co-founders, who are trying to stop a shareholder vote set for tomorrow.
Relativity made an initial bid yesterday, offering as much as $1 billion, and amended it today, the person said. The Wall Street Journal reported on the proposal earlier today.
Dena Cook, a spokeswoman for Maker, declined to comment.
The offer includes a “substantial opportunity for Maker’s talent and employees to directly and significantly participate in the long-term growth of Relativity,” said David Shane, a spokesman for Relativity, which is based in Beverly Hills, California.
Disney, based in Burbank, California, agreed on March 24 to acquire Maker, a supplier of content for Google Inc.’s YouTube video-sharing site, for $500 million, plus as much as $450 million more if performance targets are met.
Maker has scheduled a vote on Disney’s offer for tomorrow. The company has more than 55,000 channels, 380 million subscribers and 5.5 billion views a month on YouTube, Disney said at time of its purchase announcement.
Zappin and three other co-founders of Maker asked a state court judge in Los Angeles to block the April 15 vote on the Disney offer, saying the notice to shareholders was misleading.
“Certain Maker directors illegally issued shares to themselves and diluted the common stock for their own financial gain to the detriment of other Maker shareholders and take control of Makers’ board so that they could rapidly create a liquidity event,” Zappin said in a filing last week.
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