Roku Caps Deal Bonuses At $13 Million And Adds Valuation Inputs To Fox Merger Proxy

Roku voluntarily supplemented its merger disclosures in an 8-K filed Tuesday, capping transaction bonuses at $13,000,000 in total and adding the discount rates behind its banker's fairness analysis. The company says demand letters from purported stockholders, which alleged omissions or misstatements in the joint proxy statement, are without merit.

What the supplement says

Roku agreed in June to merge into a Fox subsidiary. In a two-step structure, Roku ends up a wholly owned Fox unit. Fox's registration statement was declared effective on September 1, and the joint proxy statement was mailed to both companies' stockholders on or about that date.

Since the mailing, Roku says it has received demand letters asking for corrective disclosures before its special meeting. It denies every allegation and says nothing in the supplement admits that any added disclosure was required or material. It says it acted to avoid "nuisance and possible expense and business delays."

The bonus language is the most concrete change:

• Transaction bonuses may not exceed $13,000,000 in the aggregate.
• No individual reporting directly to the CEO may receive more than $2,000,000.
• No other individual may receive more than $600,000.

Named executive officers may receive a transaction and/or retention bonus, except Mr. Wood, who gets neither. Recipients, amounts and final terms are still subject to Roku's approval.

The valuation inputs

The filing amends the description of Qatalyst Partners' opinion, the analysis by Roku's financial advisor. It uses discount rates of 12.5% to 18.0% for Roku on its own, and 9.0% to 13.0% for the combined company. Both are based on estimated weighted average cost of capital.

It also states projected Roku cash of about $2.43 billion as of June 30, 2026, and combined Roku and Fox net debt of about negative $630 million as of that date, excluding the mergers.

The peer tables now show implied enterprise values and 2026 estimated earnings multiples. Alphabet is the largest at $4,432.2 billion and 19.2x. Others include:

• Meta Platforms: $1,495.2 billion, 10.3x
• Netflix: $346.2 billion, 20.4x
• AppLovin: $168.8 billion, 24.3x
• The Trade Desk: $8.0 billion, 6.3x

What to watch

Roku's special meeting, where stockholders vote on the merger, is the next decision point. The filing warns that lawsuits or more demand letters may follow, and that Roku will not necessarily disclose them unless the law requires it. Roku shares closed at $152.06 on Tuesday and were at $152.53 in thinly traded after-hours trading.

Roku's market value stood at $22.8 billion at Tuesday's close, and the supplement leaves the rest of the proxy unchanged.

Sources

• 425 — ROKU, INC re: ROKU, INC (ROKU) — SEC EDGAR