# Negotiating Coyote/HPP Merger & Strategic Path Forward

**March 02, 2026 at 10:00 AM** · 98m 41s · Participants: JD Busfield, Mikel Elliot, Vasco, James Adcock

### Bottom Line
The group is negotiating a complex, no-cash merger with HPP to acquire Coyote's distressed assets, aiming to create a right-sized, market-leading studio services platform. The deal's success hinges on aggressive terms and securing a capital partner (ADC) to pressure HPP's leadership.

### Key Takeaways
- **Merger Structure:** The proposed deal is a tax-free asset contribution by HPP into a new "SuperCo," with no cash consideration, giving HPP a distant equity carry but no operational control.
- **Financial Reality:** Coyote's core business is deeply distressed, with $35M in revenue losing $20M in 2025, making HPP highly motivated to offload it.
- **Strategic Rationale:** The merger is seen as necessary for survival and market share capture in a distressed sector, but significant upside requires future bolt-ons (e.g., with live event player CES).
- **Negotiation Challenge:** HPP's Victor is a key obstacle due to ego and past resentment; the group plans to engage banker ADC to apply top-down pressure and bridge the valuation gap.

### Action Items
- [ ] Refine the financial model (Pro Forma 2026+) to scrub out unneeded leases, add savings from asset dispositions, and show a clearer path to profitability. — @James Adcock & JD `high`
- [ ] Build scenario analysis and talking points outlining potential upside from future bolt-ons (e.g., with CES) to make the investment case more attractive. — @James Adcock `high`
- [ ] Set up a meeting with investment bank ADC (Juliette) to present the refined model and strategy for the HPP deal. — @Mik `high`
- [ ] Review and develop a strategy for handling the union agreements (CBAs) that will be received from HPP, as this is a critical risk. — @James Adcock `medium`

### Topics
Coyote/HPP Merger Negotiation, Financial Performance Analysis, Deal Structure & Valuation, Strategic Growth & Bolt-ons, Negotiation Strategy & ADC Engagement

**Sentiment:** neutral

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*Generated by Call Assistant on 2026-04-09 11:45*