UPDATE 1-Jones Soda ends exclusivity provision in Reed's deal
* To consider unsolicited bid by third party
* Says receives letter from Nasdaq regarding delisting
March 22 (Reuters) - Jones Soda Co JSDA.O, which is exploring strategic alternatives, said it terminated the exclusivity provisions of a potential merger deal with Reed's Inc REED.O to explore an unsolicited bid by a third party.
Earlier in March, Jones Soda signed a letter of intent to be acquired by Reed's in a cash-and-stock deal, which valued Jones at about $9.7 million.
Seattle-based Jones, famed for its unusual flavors, including mashed-potato flavored drinks, said it would reimburse Reed's for its third party out-of-pocket expenses, which are not to exceed $75,000, in accordance with the letter of intent.
Jones Soda has informed Reed's that it continues to be interested in discussing a deal, but the board wants to explore the third party proposal and any other strategic alternatives, the company said in a statement.
In a separate statement, Jones Soda said it received a letter from Nasdaq stating that the company had not regained compliance with the $1.00 per share minimum bid price requirement for continued listing under Nasdaq listing norms in accordance with a previous letter issued on Sept 15, 2009.
The Nasdaq letter stated that unless Jones Soda requests a hearing to appeal by Tuesday, trading of the common stock will be suspended at the opening of business on March 25, 2010, and will be removed from listing on the Nasdaq Stock Market.
The company said it plans to request a hearing before a Nasdaq Hearings Panel to appeal the delisting determination.
Shares of the Seattle-based company closed at $0.52 on Monday on the Nasdaq. (Reporting by Shobhana Chadha in Bangalore; Editing by Jarshad Kakkrakandy)
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