United States securities and exchange commission logo
October 14, 2022
Robert Glaser
Chief Executive Officer
RealNetworks Inc.
1501 First Avenue South
Seattle, WA 98134
Re: RealNetworks Inc.
Preliminary Proxy
Statement on Schedule 14A
Filed September 19,
2022
File No. 001-37745
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Transaction
Statement on Schedule 13E-3
Filed September 19,
2022
File No. 005-52907
Dear Robert Glaser:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Preliminary Proxy Statement on Schedule 14A filed September 19, 2022
Cover Page
1. We note your disclosure
that shares of preferred stock are non-voting except as required
by law. Please
revise your disclosure to state whether state law requires that the shares of
preferred stock have a
vote in the current transaction.
Summary Term Sheet, page 1
2. Refer to the section on
page 5 captioned Reasons for the merger. Revise to disclose the
fairness determination,
which is referenced in the caption but not included in the text
below.
Robert Glaser
FirstName LastNameRobert Glaser
RealNetworks Inc.
Comapany
October 14,NameRealNetworks
2022 Inc.
October
Page 2 14, 2022 Page 2
FirstName LastName
Required Shareholder Votes for the Merger, page 3
3. We note that you will require both the affirmative votes of the
holders of the majority of
the outstanding shares of your Common Stock and preferred stock, each
voting as a
separate class, and the affirmative vote of the holders of a majority
of the outstanding
shares of your Common Stock held by the holders of your Common Stock
other than the
Voting Agreement Shareholders. Revise to affirmatively state the
percentage of common
stock outstanding that would be required to vote in favor of the
transaction to satisfy the
majority of the minority condition.
Reasons for the Merger, page 38
4. We note your statement that this is a "non-exhaustive" list of the
material factors
considered by the Special Committee. Please revise to confirm that
this list encompasses
all material factors considered by the Special Committee in
recommending the
transaction.
5. Please revise to include whether the Special Committee or the Board
considered the
fairness of the merger agreement in comparison to the company s net
book value. In this
regard, we note that the merger consideration offered is less than the
net book value as of
June 30, 2022, which was $0.75. Refer to Instruction 2 of Item 1014 of
Regulation M-A.
6. We note that the Special Committee considered the analysis and opinion
of Houlihan
Lokey. Please be advised that if any filing person has based its
fairness determination of
the analysis of factors undertaken by others, such person must
expressly adopt this
analysis and discussion as their own in order to satisfy their
disclosure obligation. See
question 20 of Exchange Act Release No. 34-17719 (April 13, 1981).
Please revise to
state, if true, that the Special Committee adopted Houlihan Lokey s
analysis and
conclusions as its own. Alternatively, revise your disclosure to
include a discussion
responsive to Item 1014 of Regulation M-A and to address the factors
listed in Instruction
2 to Item 1014.
Position of the Purchaser Filing Parties as to the Fairness of the Merger, page
46
7. We note your statements that "Under the SEC rules governing going-
private transactions, each of the Purchaser Filing Parties may be
deemed to be an affiliate
of the Company." Given your determination to include those persons as
filing persons to
the Schedule 13E-3, it is inappropriate to make such disclaimers.
Please revise.
Opinion of the Special Committee's Financial Advisor, page 48
8. Please revise this section to disclose the data underlying the results
described in each
analysis and to show how that information resulted in the
multiples/values disclosed for
on page 53 for the Selected Companies analysis.
Robert Glaser
FirstName LastNameRobert Glaser
RealNetworks Inc.
Comapany
October 14,NameRealNetworks
2022 Inc.
October
Page 3 14, 2022 Page 3
FirstName LastName
9. Please disclose the basis for discount rates and terminal value
multiples used in the
Discounted Cash Flow analysis.
10. Revise the section captioned Miscellaneous to describe more
precisely the work
Houlihan Lokey has conducted for the relevant persons and quantify the
fees received by
Houlihan Lokey during the past two years as required by Item
1015(b)(4) of Regulation
M-A.
Financing, page 75
11. We note the parties intention that the Parent Guarantor will fund
its obligations under the
merger agreement with cash and other liquid assets on hand. Please
revise to provide
greater detail as to the source of funding. Further, please disclose
the existence of any
alternative financing arrangements in the event that this source of
funds is insufficient or
unavailable for any reason. If there are none, so state. Refer to Item
1007(b) of Regulation
M-A.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Austin Pattan, Staff Attorney, at (202) 551-6756, or
Joshua Shainess,
Legal Branch Chief, at (202) 551-7951 with any questions. You may also contact
Dan
Duchovny, Senior Special Counsel in the Office of Mergers and Acquisitions, at
(202) 551-3619.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Andrew Ledbetter