There could be some trouble in social TV land. Viggle and GetGlue, two competing companion mobile applications for television viewers, announced they have terminated their agreement to merge.
Viggle, a TV loyalty platform that automatically identifies the shows people are watching, said in November that it wouldTV guide and manual checkin app GetGlue for $25 million and 48.3 million shares. The split is being described as cordial by both sides.
"During the time we started talking to GetGlue about an acquisition and since the merger agreement was signed in November, we have seen impressive growth in our business," Viggle Chief Executive Robert F.X. Sillerman said in a statement today. "We wish GetGlue and [founder] Alex [Iskold] all the best."
Viggle said it verified nearly 870,000 audio check-ins on January 13, marking its single busiest day to date.
Sillerman's statement and the interestingly timed checkin announcement imply that Viggle's 1-year-old business, which rewards television viewers with points for watching shows, will do just fine without the help of its bigger, older one-time friend. GetGlue has more than 3.5 million registered users. Viggle has 1.62 million members, up 400,000 from the time the deal was announced.
When reached for comment, GetGlue's Iskold declined to provide a statement on the dissolution of the deal to CNET. "We are moving forward as an independent company, and all of us at GetGlue are excited about growing our social network and the leadership position on the second screen," he wrote in a blog post.
One possible explanation for the cessation could have to do with money troubles at Viggle. The company said in November that it was raising up to $60 million in convertible debt financing to fund the GetGlue buy, but that doesn't appear to have taken place. Instead, on January 10, Viggle's board approved an increase to the company's line of credit to $20 million from $15 million, according to documents filed with the Securities and Exchange Commission. The line of credit had already been raised to $15 million from $12 million in the previous month.
GetGlue, the product of AdaptiveBlue, will be getting a small break-up fee of $500,000, CNET has confirmed. The termination fee was a condition of the deal, as documented in Viggle's filing with the SEC:
The Merger Agreement also contains certain termination rights for both Viggle and AdaptiveBlue and further provides that, upon termination of the Merger Agreement under certain circumstances, including Viggle's failure to obtain financing as described above, Viggle will be obligated to reimburse AdaptiveBlue up to $500,000 for its costs, fees and expenses incurred in connection with the negotiation of and performance of its obligations under the Merger Agreement and the transactions contemplated thereunder.