Atari launches public-ish offer for €30 million of 6.5% convertibles

Chicago, May 25 – Atari SA launched a technically public offering for €30 million of 6.5% senior convertible bonds due July 31, 2026, according to a press release.

There is a public subscription period and a priority subscription period for current shareholders from May 25 to 11 a.m. ET on May 30.

The priority subscription period is open to shareholders with registered shares as of the record date, May 24.

Shareholders may subscribe to the convertible bonds on an irreducible basis up to the amount of their portion in the share capital of the company and then on a reducible basis to a number of convertible bonds over the number which they can subscribe on an irreducible basis, with allocations prorated to their irreducible applications up to the limit of their demand.

Any convertible bonds not sold to shareholders will be offered to the public; however, Irata LLC, which holds 27.73% of the share capital of Atari, has already committed to subscribe for all of the offering. Therefore, public orders are not likely to be served.

Irata (Atari backwards) is held by Wade Rosen, chairman and chief executive officer of Atari.

Irata may subscribe for up to 55.46 million of the convertible bonds on a reducible basis and then has further committed to another 144.54 million (€21,681,000) on a reducible basis. Irata will cover any subscriptions not fully paid by subscribers up to a maximum of 200 million convertible bonds, or up to €30 million.

The amount of the subscription commitment from Irata will first be paid via a set-off of shareholder loans made by Irata to Atari in the amount of €16,333,740.68 with the balance paid in cash.

There is a lock-up period on the convertible bonds for Irata through June 30, 2025. This is the date on which a triggering threshold for a mandatory tender offer on the company’s shares is raised to 50% from 30%, unless a third party conducts a tender offer on Atari’s securities before that date.

Convertible details

The subscription price has been set at €0.15 per convertible bond, or a 15% premium to the closing price of the company’s shares on May 23 of €0.1304 per share. There will be no discount.

Holders will be granted conversion rights exercisable into new shares of the company.

The new shares will be fungible with existing shares and will be admitted to trading on the Euronext Growth market in Paris.

The bonds may be redeemed before the maturity date at the company’s option or the holders’ option under certain conditions.

Starting on Aug. 21, 2025, the bonds may be redeemed early subject to a 130% hurdle.

There will be a clean-up call option if there are less than 20% of the bonds outstanding.

Any change of control will trigger a par put.

The bonds will be listed on Euronext Growth before July 5, at the latest.

Settlement is expected on June 5.

Proceeds

Proceeds will be used partially to set off the shareholder loan from Irata. The balance will be used for the development of 12 new games that are expected to be launched in the next 18 months and acquisition opportunities which may arise.

Without this transaction, Atari does not have the ability to finance its obligations for the next 12 months, including an expected contribution from Night Dive Studios. Atari needs around €4.5 million to operate over the next 12 months. Currently, the company has enough funds to operate through the end of June.

Atari is a Paris entertainment and licensing company.

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