SCHEDULE: Reservoir Media Receives $10.50/Share Go-Private Offer

A group of investors, including Richmond Hill Investment Co. and Wesbild, Inc., propose to acquire all outstanding shares of Reservoir Media, Inc. not already owned by them for $10.50 per share in cash.

Summary

• Richmond Hill Investment Co., LP (RH) and Wesbild, Inc. (Wesbild), collectively referred to as the 'Investors,' have submitted a preliminary non-binding proposal to acquire all outstanding shares of Reservoir Media, Inc. (the 'Issuer') not already owned by them or their affiliates.
• The proposed cash purchase price is $10.50 per share.
• This offer represents an approximate 39% premium over the Issuer's closing price on February 25, 2026, and approximately 41% over the 90-day volume-weighted average trading price through February 25, 2026.
• The implied enterprise value to EBITDA multiple is approximately 15.6x, based on the midpoint of the Issuer's publicly disclosed guidance for the fiscal year ending 2026, which is noted as a material premium to comparable companies.
• Wesbild beneficially owns approximately 44% of the outstanding common stock, and Richmond Hill Investment Co., LP beneficially owns 21.08% of the outstanding common stock.
• The transaction is not subject to any financing condition, as Richmond Hill intends to obtain the requisite financing promptly.
• The Investors expect the Board to form a special committee of independent directors to review and potentially approve the proposal, and they will not proceed without such approval.
• If completed, the Issuer's common stock would be delisted from The Nasdaq Stock Market LLC and its registration terminated under the Exchange Act.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive development for existing public shareholders due to the substantial premium offered and the non-contingent financing, despite the non-binding nature of the proposal which introduces some uncertainty.

Positives

• The proposed acquisition price of $10.50 per share offers a significant premium of approximately 39% over the recent closing price and 41% over the 90-day volume-weighted average price, providing an attractive liquidity option for public shareholders.
• The implied enterprise value to EBITDA multiple of 15.6x is a material premium compared to the trading multiples of comparable companies.
• The proposed transaction is not subject to a financing contingency, indicating a higher likelihood of funding if the deal progresses.
• The significant beneficial ownership by the proposing investors (Wesbild at ~44% and Richmond Hill at ~21%) suggests strong internal alignment and commitment to the transaction.

Negatives

• The proposal is preliminary and non-binding, meaning there is no assurance that discussions will lead to a definitive agreement or that the transaction will be consummated.
• Discussions concerning the transaction may be terminated at any time without prior notice.
• The transaction is contingent on the approval of a Special Committee of independent directors and potentially regulatory approvals, which are beyond the control of the Investors.
• The Reporting Persons expressly disclaim that they have agreed to act as a group for beneficial ownership purposes, despite filing jointly, which could introduce complexities.

Risks

• There is no assurance that any discussions between the Investors and the Issuer will result in a definitive agreement concerning the proposed transaction.
• Discussions regarding the transaction may be terminated at any time and without prior notice.
• Entry into a definitive agreement and consummation of the transaction are subject to contingencies beyond the Investors' control, including approval by the Board and a Special Committee, and receipt of all necessary regulatory approvals.
• The Reporting Persons disclaim that they have agreed to act as a group, which could lead to differing interests or actions among them.

Future Outlook

The Investors anticipate the formation of a special committee by the Issuer's Board to evaluate the non-binding acquisition proposal. If a definitive agreement is reached and the transaction is consummated, the Issuer's common stock would be delisted from Nasdaq and its registration terminated. The Investors may also formulate other plans or proposals regarding the Issuer in the future.

Management Comments

• "Our proposal offers the Company's stockholders that are not the Investors or certain of their affiliates an opportunity to derisk their investment at a compelling valuation, providing an attractive liquidity option and certainty of full and fair value." Ryan P. Taylor (Richmond Hill Investment Co., LP) and Hassan Khosrowshahi (Wesbild, Inc.)
• "We are highly confident that certain other significant stockholders of the Company will be supportive of the transaction." Ryan P. Taylor (Richmond Hill Investment Co., LP) and Hassan Khosrowshahi (Wesbild, Inc.)
• "The proposed transaction would not be subject to any financing contingency or condition." Ryan P. Taylor (Richmond Hill Investment Co., LP) and Hassan Khosrowshahi (Wesbild, Inc.)
• "The Investors will not move forward with the Proposal unless it is approved by such a Special Committee." Ryan P. Taylor (Richmond Hill Investment Co., LP) and Hassan Khosrowshahi (Wesbild, Inc.)
• "We are interested only in acquiring the outstanding common stock of the Company that the Investors or certain of their affiliates do not already own. At this time, neither Richmond Hill nor Wesbild is interested in selling shares in the Company to a third party." Ryan P. Taylor (Richmond Hill Investment Co., LP) and Hassan Khosrowshahi (Wesbild, Inc.)

Industry Context

StockSavvy.ai notes that the proposed going-private transaction for Reservoir Media, a music rights company, reflects a broader trend in the entertainment industry where private capital is increasingly seeking to acquire established content libraries and intellectual property. The significant premium offered suggests a strong belief in the long-term value of Reservoir's assets, potentially driven by the stable, recurring revenue streams from music publishing and recorded music, which are attractive in a volatile market. This move could also be a response to the increasing competition and consolidation within the music rights space, where scale and efficient management of catalogs are crucial.

Comparison to Industry Standards

• The implied enterprise value to EBITDA multiple of 15.6x is stated to be a 'material premium to the trading multiple of comparable companies.' While specific comparable companies are not named, this suggests the offer is above the current market valuation for similar music rights or content-centric businesses.
• The 39-41% premium over recent trading prices is substantial, often seen in transactions where strategic buyers or private equity firms aim to take a company private, offering a clear exit for public shareholders at a favorable valuation compared to typical market trading.

Related Party Transactions

• The acquisition proposal itself is a related party transaction, as the acquiring parties (Richmond Hill Investment Co., LP and Wesbild, Inc.) are significant beneficial owners of Reservoir Media, Inc. common stock.
• Ryan P. Taylor, a Reporting Person, is a non-employee director of the Issuer and has been awarded Deferred Stock Units (DSUs) and Restricted Stock Units (RSUs) as compensation, with instructions to transfer settled shares to ER Reservoir LLC, another Reporting Person.
• The Joint Filing Agreement among the Reporting Persons, while disclaiming group status for beneficial ownership, formalizes their coordinated filing regarding their interests in the Issuer.

Stakeholder Impact

• Shareholders: Potential to receive a significant cash premium for their shares, offering an attractive liquidity event.
• Employees: Potential for changes in management, operations, or corporate culture if the company goes private, though not explicitly detailed.
• Customers/Suppliers: No immediate direct impact detailed, but a change in ownership could lead to strategic shifts affecting business relationships.
• Creditors: The financing structure for the acquisition could impact the company's debt profile post-transaction, though specific details are not provided in this filing.

Next Steps

• The Board of Directors of Reservoir Media, Inc. is expected to form a special committee of independent and disinterested directors to review the proposal.
• The Special Committee is expected to select and engage independent legal and financial advisors.
• The Investors will engage in due diligence activities, communications, and negotiations with the Special Committee, the Board, management, advisors, and other stakeholders.
• If approved by the Special Committee, definitive agreements would need to be entered into between the Company, Richmond Hill, and Wesbild.
• The transaction would be subject to the satisfaction of any conditions in a definitive agreement, including necessary regulatory approvals.
• If the Proposed Transaction is completed, the Issuer's Common Stock would become eligible for termination of registration and delisted from The Nasdaq Stock Market LLC.

Key Dates

Recommendation

A seasoned investor would likely 'hold' shares of Reservoir Media, Inc. given the significant cash premium offered in the non-binding proposal. While the proposal is not definitive and carries inherent risks of non-completion, the substantial premium (39-41%) provides a strong incentive to await further developments. Selling now would forgo the potential upside if the deal closes, while buying at current prices would be an arbitrage play with associated risks. The non-contingent financing and large existing stakes of the proposing investors lend credibility to the offer, making a 'hold' position prudent to capture the potential premium.

Keywords

Reservoir Media, go-private, acquisition proposal, Schedule 13D, Richmond Hill Investment Co., Wesbild, music rights, entertainment industry, private equity, delisting, shareholder premium