LOS ANGELES, May 19, 2020 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ:RILY) ("B. Riley") and subsidiary B. Riley Capital Management, LLC, a shareholder of Spok Holdings, Inc. (NASDAQ:SPOK) ("Spok" or the "Company"), today announced that it has sent the following letter to Spok's Board of Directors after market close on May 18, 2020.
May 18, 2020
Spok Holdings, Inc. 6850 Versar Center, Suite 420 Springfield, VA 22151
To the Board of Directors:
As shareholders, we are disappointed by Spok's Board of Directors' dismissive response to our March 16, 2020 proposal to acquire the Company for $12.00 per share. We have refrained from responding sooner in acknowledgement of the disruption caused by the COVID-19 pandemic. However, we do not believe that the current environment should shield Spok management from accountability to its shareholders indefinitely. We would also note that Spok's common stock was trading in the current $10 per share range before the emergence of COVID-19, reflecting investors' lack of confidence in the direction of the Company.
Palogic Value Management, a large and long-term shareholder, published a letter on March 24, 2020 in which it argued strongly that the Company should initiate a sale process – a stance that, as a large shareholder, we also support. Palogic's letter states, in part that "fair value for shareholders will only be realized through the sale of the Company to a strategic partner who provides the scale and scope needed to capitalize on the large investment the Company has made into its software unit. Unfortunately, we have lost faith in the Company's ability to maximize our investment on their own given declining corporate profitability and extremely limited visibility following years of significant software unit spend."
We continue to stand by our offer and believe strongly that a sale process is in the best interest of Spok's shareholders. All businesses will be challenged in novel ways over the coming months, but shareholders must hold management teams accountable through times of crisis as well as prosperity. As this crisis shines a spotlight on hospitals' need for maximum efficiency and patient care, Spok Go's value proposition should be clear to Spok's customers and we expect meaningful new sales bookings to justify the years and tens of millions of dollars spent developing the product.
We look forward to management's efforts to generate value for shareholders in the near future.
Regards, Bryant Riley Chairman and Co-Chief Executive Officer B. Riley Financial, Inc.
About B. Riley Financial, Inc. (NASDAQ:RILY) B. Riley Financial provides collaborative financial services tailored to fit the capital raising and business advisory needs of public and private companies and high-net-worth individuals. The Company operates through several wholly owned subsidiaries which offer complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, corporate advisory, restructuring, due diligence, forensic accounting and litigation support, appraisal and valuation, and auction and liquidation services. Certain registered affiliates of B. Riley originate and underwrite senior secured loans for asset-rich companies. The Company also makes proprietary investments in companies and assets with attractive return profiles. For more information about B. Riley and its affiliated companies, visit www.brileyfin.com.