As expected, the Naver merger agreement has been finalized and the deal to acquire Poshmark has been officially completed.
Poshmark has been dropped from the S&P Global BMI Index and has submitted an updated 8-K filing to the SEC.
The Poshmark special stockholder meeting voted to approve the finalization of the Naver merger agreement.
At a special meeting of stockholders of Poshmark, Inc. (the "Company" or "Poshmark") held on December 27, 2022 (the "Special Meeting"), the Company's stockholders voted to approve the Company's pending acquisition by NAVER Corporation, a public corporation organized under the laws of the Republic of Korea ("Naver"). As of the date of this Current Report on Form 8-K, the transaction is expected to close in early January 2023.
- For: 258,328,439
- Against: 86,220
- Abstentions: 56,373
Meanwhile, shareholder Evgeny Nikolayevich Berdnikov is suing Poshmark over concerns the company's board had conflicts when negotiating the merger.
A Poshmark Inc. investor sued the online clothing marketplace over concerns that the company’s board had conflicts when negotiating a merger with South Korean search engine Naver Corp.
The lawsuit, brought on Monday in the Delaware Chancery Court by shareholder Evgeny Nikolayevich Berdnikov, says the proposed $1.2 billion merger was a “potentially-conflicted and flawed process orchestrated and spearheaded by certain Company insiders who have their own unique interests in a transaction.”
The suit seeks books and records concerning the merger process. The shareholder also alleges that California-based Poshmark’s proxy statement omitted material information over the potential conflicts of interest.
Read full complaint here.
Naver is moving to speed up the finalization of the merger to January 2023 ahead of next week's special stockholder meeting.
South Korean internet giant Naver Corp. will complete its $1.6 billion buyout of Poshmark, a U.S-based online marketplace for secondhand fashion goods, next month despite a controversy for overpaying for the acquisition and other challenges from tumbling stock price to growing market uncertainty.
Naver initially planned to complete its Poshmark buyout in April but it moved the schedule to early January, according to IT industry sources on Sunday.
Poshmark has scheduled a special virtual stockholder meeting for December 27, 2022 at 8 AM Pacific to vote on the adoption of the proposed merger plan with Naver.
Per the special meeting proxy statement:
You are cordially invited to attend a special meeting of stockholders of Poshmark, Inc., a Delaware corporation (“Poshmark” or the “Company”), which will be held virtually on Tuesday, December 27, 2022 at 8:00 am, Pacific time (including any adjournments or postponements thereof, the “Special Meeting”). Stockholders will be able to attend the Special Meeting by registering online at www.proxydocs.com/POSH and using the control number included in your proxy materials. You will not be able to attend the Special Meeting physically in person. For purposes of attendance at the Special Meeting, all references in the accompanying proxy statement to “present in person” or “in person” shall mean virtually present at the Special Meeting.
At the Special Meeting, you will be asked to consider and vote upon the adoption of the Agreement and Plan of Merger, dated as of October 3, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, NAVER Corporation, a public corporation organized under the laws of the Republic of Korea (“Parent”), Proton Parent, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Proton Parent”), and Proton Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Proton Parent (“Merger Sub”), which provides for the merger of Merger Sub with and into the Company, with the Company surviving as an indirect subsidiary of Parent (the “Merger”) on the terms and conditions set forth in the Merger Agreement.
If the Merger is completed, you will be entitled to receive $17.90 in cash, without interest and less any applicable withholding taxes (the “Merger Consideration”), for each share of Class A common stock, par value $0.0001 per share (“Class A common stock”), and Class B common stock, par value $0.0001 per share (“Class B common stock” and together with the Class A common stock, the “Poshmark common stock” or “Company common stock”), of the Company that you own as of immediately prior to the effective time of the Merger (the “Effective Time”), unless you seek and perfect your statutory appraisal rights under Delaware law.
The 200+ page document gives some interesting insight into the timeline of the acquisition, which started in January 2022 as an exploration of a potential commercial partnership between the two companies.
On January 4, 2022, a member of the Board introduced Manish Chandra, Poshmark’s co-founder and CEO, to representatives of NAVER to explore a potential commercial partnership between the companies involving (i) the expansion of Poshmark’s business into South Korea and potentially Japan and NAVER’s entry into U.S. markets and (ii) a potential private investment in Poshmark’s public equity by NAVER (such partnership and investment referred to together as the “potential commercial partnership and investment”).
There's also an interesting mention of Poshmark's Posh Shows live stream shopping feature that was rolled out for beta testing in September.
At Poshfest 2022, CEO Manish Chandra revealed Posh Shows had gone from concept paper to ready to test product in an impressive 59 days.
Posh Shows is a very very big innovation for us. Number one it's an innovation that our team created in record time. I remember writing the concept paper for this in mid-July, and the team created the product from mid-July and launched it in 59 days flat.
From the timeline in the special meeting documents, it would appear the fast pace of innovation was likely at least in part spurred on by ongoing talks with Naver.
On July 5, 2022, the Board held a meeting, with members of Poshmark management and representatives of Goodwin also in attendance. Mr. Chandra provided a status update regarding the potential commercial partnership and investment and recent interactions with NAVER, including NAVER’s continued interest in a potential acquisition of Poshmark.
Representatives of Goodwin presented an overview of the directors’ fiduciary duties under Delaware law and discussed certain considerations for the Board when undertaking an evaluation of strategic alternatives, including a potential sale of the Company. The members of Poshmark management also presented certain unaudited financial forecasts for Poshmark for fiscal years 2022 through 2025...
...Poshmark management also discussed Poshmark’s livestreaming and live auctions initiative, which Poshmark described as an opportunity to reinvent selling by making live selling available to everyone and to integrate live selling into Poshmark’s other initiatives such as Poshmark parties. Poshmark management noted that this initiative could potentially be a significant revenue generator and growth opportunity for Poshmark.
Poshmark management also noted, however, that while Poshmark was aiming to begin the new initiative in the third quarter of fiscal year 2022, the initiative was still being conceptualized, and therefore it was untested and too speculative at that point to reasonably reflect any potential revenue, costs and other financial metrics associated with such initiative in the projections being reviewed and approved by the Board.
Poshmark management and the Board discussed the initiative and the potential opportunity associated therewith, and the Board concurred with Poshmark management’s view to not include such initiative in the projections given the speculative nature of any potential revenue, costs, and other financial metrics associated with the initiative.
The Board directed Poshmark management to present information on such initiative to NAVER as part of NAVER’s due diligence and assessment of potential growth drivers such information was subsequently provided to NAVER during the due diligence meetings described below.
If approved, the companies expect the merger to be completed in April 2023.