(Updated to reflect comment from GetGlue)
Back in November, it was announced that Television loyalty service Viggle had purchased social televison app GetGlue for $25 million, along with 48.3 million shares of stock.
Now, less than two months later, the deal is off, according to a blogpost put up by GetGlue CEO Alex Iskold on Sunday.
Here is the full message:
"Today we’ve decided that GetGlue will not be merging with Viggle. The two companies remain friendly and think highly of each other.
We are moving forward as an independent company, and all of us at GetGlue are excited about growing our social network and the leadership position on the second screen. We have a strong product and partnership pipeline for 2013, and look forward to delighting our users and expanding the relationships with major networks, studios and brands.
GetGlue is a widely recognized brand and a product that is loved by millions of people. We have a passionate community of over 3.5M television fans who use the service to discuss the content they love and discover new content to watch. Over 75 major networks and studios are routinely promoting their content to our fans, and major brands like Coca-Cola, Pepsi, Intel, Gap, and Mercedes have sponsored advertising campaigns on our service."
So what exactly happened? The problem seems to be that Viggle had trouble raising the necessary finances to close the deal.
In the original 8-K, filed with the Securities and Exchange Commission in November, it said that Viggle would have to raise $60 million in financing in order to complete the merger.
"Consummation of the Merger is subject to various conditions, including, among others, (i) the absence of any law or order prohibiting the consummation of the Merger, (ii) all consents, approvals, permits and authorizations having been obtained, and (iii) Viggle receiving gross proceeds from a convertible debt financing equal to or greater than $60 million," the filing said.
The financing was set to close in 30 days, meaning December 19, but that date came and went without Viggle having raised the necessary funds.
In another form filed with the SEC on January 8, it was revealed that Viggle and AdaptiveBlue, the company that develops GetGlue, were "discussing an extension of such date and other potential modifications to the Merger Agreement."
Apparently, that discussion led to the dissolving of the agreement.
If the deal had gone through, all 34 of GetGlue’s employees, including Iskold, would have joined Viggle, which would have operated both the Viggle and GetGlue brands going forward. Iskold was set to join Viggle in a senior executive position on its management team, and to also become a member of its Board of Directors.
New York City-based GetGlue was founded in 2007. It allows users to check-in to TV shows or movies, comment along with other fans, gain loyalty points and memorabilia and discover new shows that people like them watch.
The service has over 3.2 million registered users, and a database with more than 500 million entertainment ratings and check-ins.
In January of 2012, GetGlue raised a $12 million Series D in a round led by Rho Ventures, along with existing funders TimeWarner Investments, RRE Ventures, and Union Square Ventures, pushing its total funding to $24 million.
New York City-based Viggle launched less than a year ago, in January 2012. It has 1.2 million users who are able to earn points for being loyal to their favorite shows, by voting, answering trivia questions or taking part in polls in real time with Viggle LIVE. Customer can also earn points from a service called MyGuy, a next generation fantasy sports game that knows which teams are playing when the Viggle user checks into a game on TV. Viggle allows users to check into live, DVR’d and online TV content from more than 170 of the most popular broadcast and cable channels.
Viggle users can redeem their points for real rewards at retailers such as Best Buy, Amazon, Fandango, Hulu Plus and iTunes.
A GetGlue spokesperson told VatorNews that the company has no further comment on the news. Viggle could not be reached for comment.
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