On 28 May, Premier Exhibitions put out its Full Year and Fourth Quarter 2013 Results. Deep down in the statement was the following:
Update on Titanic Monetization
As previously communicated, on October 15, 2012, the Company entered into a non-binding letter of intent with an entity representing a group of individuals (the “Consortium”) working to effect a purchase of the stock of RMS Titanic, Inc. Since entering into the LOI, Premier has been negotiating exclusively with this group. The entity with whom the Company is negotiating has been soliciting federal, state, and local government entities, as well as philanthropic contributions, to build support to go public with a broader campaign to secure capital necessary to complete a transaction. They continue to request confidentiality until they feel comfortable that there is sufficient support to go public with the project.
Due to the complexity of the transaction and the many elements that are necessary for consummation, the process has taken longer that Premier had hoped. While the Company continues discussions with this group, Premier also recognizes the uncertainty of their completing a transaction and obtaining funding commitments. The Board is therefore considering the full range of strategic and financial alternatives in this regard, which likely will include retaining an investment bank, and will pursue possible paths in parallel.
The complexity of these assets, and the need to comply with the underlying court orders, require that any transaction or arrangement be more carefully structured and executed than a typical transaction. Timing is certainly a factor, but it is not the only factor. The Board and management, together, remain committed to maximizing shareholder value.
This confirms some speculation about who this consortium might be, a group of investors trying to raise capital both with taxpayer money (that is where government money comes from) and private investors (rich people with lots of money like that guy with the hoodie who heads up a social network). You can guess the problem with raising this capital. Not only is the price astronomical, it comes with a major constraint: it stays under U.S. federal court jurisdiction because you are not allowed to sell off any portion of the collection. That means the court will be over your shoulder all the time wanting reports and details of the collection from what is being stored, how it is being carefully preserved, and when it is on display.
So the upshot of it is this: Premiere is formally notifying that they are looking for other interested parties. This may be the reason, according to Seeking Alpha that Premiere’s stock price has dropped. It dropped from $2.30 to $2.10 ion 28 May and dropped much further since. Premiere might consider appealing the judge’s decision to a higher court. And it is entirely possible down the road one of two things happening: the entire collection being shuttered until resolved or the U.S. government seizing it as a national/international treasure under some obscure international treaty or possibly use a congressional resolution passed years ago as the pretext.
1. Failed Titanic Sale Won’t Sink Premier Exhibitions(18 June 2013,Seeking Alpha)
2. Premier Exhibitions Reports Full Year and Fourth Quarter 2013 Results (28 May 2013, Global Newswire-Press Release)