Clinton Group Increases Overland Storage Stake Ahead of Merger

 

Clinton Group ups the ante, helping out Overland Storage where they can.

Underdisclosed.com favorite Clinton Group, Inc.was a major shareholder in Overland Storage, a maker of data storage products.

Overland Stoage, Inc. Logo

Investment firm Clinton Group raises its direct stake in Overland Storage ahead of Tandberg Data acquisition and Nasdaq noncompliance.

As of September 2013, Clinton held about 2.9 million shares and another 2.0 million shares underlying warrants and convertible notes.  This amount to about a 14.9% interest, on a diluted basis.*

On November 14, Clinton group filed its Form 4 for Overland, disclosing that on November 8, it had converted its notes, to the tune of 769,230 shares of OVRL, based on a $1.0 million principal amount and a $1.30 conversion price.**  We do note that OVRL has reached the $1.00 point once in November, on November 1, when it hit $1.10/share and closed at $0.98/share.

Takeaway?  We expect that Overland asked for this cash infusion from a supportive shareholder since Overland is also the unlucky recipient of a notice from Nasdaq saying it could face delisting if it doesn’t get its share price over $1.00 for 10 consecutive business days.  In addition, one of Overland’s directors, Joseph A. De Perio, is a portfolio manager for Clinton Group.

In addition, also on November 1, Overland agreed to acquire Tandberg Data Holdings, payable in OVRL shares to the tune of 54% of Overland.

Tandberg Data Logo

Tandberg Data Holdings: soon to be acquired by Overland Storage and account for 54% of outstanding Overland Storage shares.

The $1.30/share price seems to be the marker since the Form 8-K did not include a specified transaction value.

*Based on SEC rules for calculating beneficial ownership, which is not the same a “fully diluted basis.”
**Note to Clinton Group compliance team: Your November 2013 Form 4’s were very late. I’m sure we’ll see note of this in next year’s Overland proxy statement.

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