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Astra Space, Inc. to be Taken Private

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Astra Space, Inc. (ASTR) has entered a definitive merger agreement for the Parent to acquire all shares not already owned for $0.50 per share. The Special Committee of the Board of Directors unanimously recommended the transaction, with the closing expected in the second quarter of 2024.
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Insights

The proposed acquisition of Astra Space, Inc. at a price of $0.50 per share represents a significant discount compared to its recent closing price of $0.86. This presents a noteworthy discrepancy that could raise concerns among minority shareholders and could potentially lead to legal challenges or demands for a higher purchase price. The transaction suggests a potential lack of confidence by the management in the company's standalone future prospects or an attempt to consolidate control amidst a challenging liquidity situation.

Investors should closely monitor the implications of this merger, particularly in terms of shareholder value, market reaction and the strategic direction post-merger. The involvement of long-term investors and the composition of the acquiring entity suggest that the deal is structured to align with the long-term strategic goals of the company, possibly at the expense of short-term shareholder gains.

The unanimous recommendation by a Special Committee comprised of independent directors, alongside the abstention from voting by interested parties, is a critical governance step to ensure fairness and address potential conflicts of interest. However, the merger agreement's approval without a broader stockholder vote, due to the written consent of the holders of the requisite number of shares, could be a point of contention. It is imperative to scrutinize the transaction for compliance with fiduciary duties and to anticipate any legal actions from minority shareholders who may feel their interests are not adequately represented.

Given the nature of the transaction, regulatory scrutiny is expected to ensure that all customary closing conditions are met, including antitrust laws and other regulatory requirements. The contribution of assets by SherpaVentures Fund II, LP in exchange for equity and warrants in the Parent company also necessitates a careful examination of the terms to safeguard the interests of all stakeholders.

From a market perspective, the acquisition's timing and terms may reflect broader industry trends, such as consolidation in the space sector due to capital-intensive requirements and the need for scale to compete effectively. It's crucial to assess the competitive landscape and how this acquisition positions Astra for future growth against its peers. The market's response to the acquisition will serve as a barometer for investor sentiment regarding the valuation and strategic implications of the deal.

Furthermore, the impact on Astra's stock price and trading volume in the short-term will provide insights into market perceptions of the deal's fairness and strategic fit. A significant deviation from the offered acquisition price might indicate market expectations of a revised offer or anticipation of competing bids, which could lead to increased volatility in Astra's stock.

Unanimously Recommended by Special Committee of the Astra Board of Directors

ALAMEDA, Calif.--(BUSINESS WIRE)-- Astra Space, Inc. (“Astra” or the “Company”) (Nasdaq: ASTR) announced today that it has entered into a definitive merger agreement pursuant to which the acquiring entity (the “Parent”) has agreed, subject to customary closing conditions, to acquire all shares of Astra common stock not already owned by it for $0.50 per share in cash. On March 6, 2024, the closing price of Astra’s Class A common stock was $0.86 per share.

The Parent was formed by Chris Kemp, Astra’s co-founder, chief executive officer and chairman, and Dr. Adam London, Astra’s co-founder, chief technology officer and director. The Parent is expected to be owned, at the closing of the transaction, by a number of long-term investors of the Company and its predecessor, including Mr. Kemp and Dr. London.

A special committee (the “Special Committee”) of the Board of Directors of the Company (the “Board”), comprised solely of independent and disinterested directors, advised by its own independent financial and legal advisors, and taking into account Astra’s current liquidity situation, among other factors, determined that the proposed transaction is in the best interests of Astra and the holders of Astra’s common stock other than Chris Kemp, Dr. Adam London and their respective affiliates and unanimously recommended that the Board approve the transaction. Acting upon the recommendation of the Special Committee, the Board approved the transaction, with Chris Kemp, Dr. Adam London and Scott Stanford abstaining from the vote. SherpaVentures Fund II, LP, an affiliate of Scott Stanford, has agreed to contribute its Astra Class A common stock, Senior Secured Convertible Notes due 2025 and Common Stock Warrants to Parent in exchange for equity and warrants of Parent in connection with the transaction.

The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions. The transaction has been approved by the written consent of the holders of the requisite number of shares of Astra’s common stock, such that no additional stockholder approval is required.

About Astra Space, Inc.

Astra’s mission is to improve life on Earth from space by creating a healthier and more connected planet. Today, Astra offers one of the lowest cost-per-launch dedicated orbital launch services, and one of the industry’s leading flight-proven electric propulsion systems for satellites, the Astra Spacecraft Engine.

No Offer or Solicitation

This press release is neither an offer to sell, nor a solicitation of an offer to buy any securities, the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Additional Information and Where to Find it

The Company will prepare and file an information statement on Schedule 14C for its stockholders with respect to the approval of the transaction described herein. When completed, the information statement will be mailed to the Company’s stockholders. In addition, certain participants in the transaction will prepare and file with the Securities and Exchange Commission (the “SEC”) a Schedule 13E-3 Transaction Statement, which will contain important information on the Company, the acquirors, the transaction and related matters, including the terms and conditions of the transaction. You may obtain copies of all documents filed by the Company with the SEC regarding this transaction, free of charge, at the SEC's website, www.sec.gov or from the Company’s website at https://investor.astra.com.

Stockholders of the Company are urged to read all relevant documents filed with the SEC, including the Schedule 14C and the Schedule 13E-3 Transaction Statement, as well as any amendments or supplements to these documents, carefully when they become available because they will contain important information about the transaction.

Safe Harbor

Certain statements made in this press release are “forward-looking statements”. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements.

The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: (i) risks associated with transactions generally, such as the inability to obtain, or delays in obtaining, any required approvals or other consents; (ii) the failure to consummate or delay in consummating the transaction for other reasons; (iii) the risk that a condition to closing of the transaction may not be satisfied; (iv) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (v) the outcome of any legal proceedings that may be instituted following announcement of the merger; (vi) failure to obtain the financing required to consummate the transaction; (vii) unfavorable reaction to the transaction by customers, suppliers and employees; and (viii) other risks and uncertainties described discussed from time to time in other reports and other public filings with SEC, including our annual reports and quarterly reports.

Investor Contact:

investors@astra.com

Media Contact:

press@astra.com

Source: Astra Space, Inc.

FAQ

What is the acquiring entity offering to acquire all shares of Astra common stock?

The acquiring entity (the Parent) has agreed to acquire all shares of Astra common stock not already owned for $0.50 per share in cash.

Who formed the Parent entity for the acquisition?

The Parent was formed by Chris Kemp, Astra's co-founder, CEO, and chairman, and Dr. Adam London, Astra's co-founder, CTO, and director.

When is the expected closing date for the transaction?

The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions.

Who unanimously recommended the proposed transaction?

The Special Committee of the Board of Directors, advised by independent financial and legal advisors, unanimously recommended the transaction.

Astra Space, Inc.

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