The deal today announced by Hyro with Kit Digital is a very poor...

The deal today announced by Hyro with Kit Digital is a very poor one indeed. Not only is Kit Digital a mess - with significant issues re management and integration and cash flow concerns - see postings on Reuters - https://www.google.com/search?q=kit+digital+news&hl=en&rlz=1G1GGLQ_ENAU315&prmd=imvnsu&source=univ&tbm=nws&tbo=u&sa=X&ei=kMaUT9jXIoKfiQeG5eSJBA&ved=0CDkQqAIoADAB. In addition a potential class action has been announced.

However of more concern is the value to the shareholders of the deal just announced.

The consideration is 2079972 shares (or $17.2m at Kit's discretion). As the share price is around US $7 currently and it would need to be greater than US$8.70 we can assume it will offer the shares.

If we take the current price of US7 this equates to cA$14m consideration. If we reduce that by 20% - the retention amount of $2.8m - then the net consideration available in 6 months is $11.2m. There is $3m of debt owing to the Convertible Note Holder which we believe is fully drawn. This will need to be repaid before the shareholders get any return. We can probably safely assume that the net tangible assets of the balance will be close to zero - after examining the 31 December accounts.
Therefore the value to the shareholders in 6 months time - assuming the share price of Kit has not fallen further - (note it has fallen from $12 - $7 in the past two months).
All this means is that the Total value available to shareholders in 6 months is $8.2m which equates to approx
30c a share. This also ignores other risk issues!!