Digital Impact, in the midst of a hostile takeover attempt by infoUSA, has called the data firm’s $2.00 per share unsolicited tender offer “financially inadequate and not in the best interests of Digital Impact’s stockholders.”
The company is recommending that shareholders take no action regarding infoUSA’s offer, which is set to expire at midnight on March 23. Shares of Digital Impact closed at $1.98 Monday, within a 52-week range of $1.08 to $2.75, but well below the double-digit heights reached in 2000. InfoUSA originally proposed the $2 per-share acquisition on February 10, when it was a 38-percent premium over its closing price of $1.45.
“The Digital Impact board has thoroughly considered infoUSA’s unsolicited tender offer and has unanimously rejected the offer. The board believes that the offer is financially inadequate, opportunistic and fails to reflect the underlying value of the company,” William Park, chairman and CEO of Digital Impact, said in a statement. “infoUSA’s unsolicited, opportunistic offer does not recognize the long-term value of our company. We believe that continued execution of our business plan will enable us to deliver value to our stockholders in excess of infoUSA’s offer.”
To further strengthen its position, Digital Impact has also adopted a “poison pill” stockholder rights plan, making any hostile takeover more difficult by increasing the voting power of existing stockholders if a person or group acquires more than 15 percent of the company’s stock. That plan takes effect March 16.
When infoUSA initiated the tender offer to shareholders, Vin Gupta, chairman and CEOof infoUSA, called the offer an “outstanding opportunity for Digital Impact’s stockholders to maximize the value of their investment,” and lamented the lack of cooperation from the company.
“While we still prefer to move forward with Digital Impact on a cooperative basis, Digital Impact’s failure to agree to negotiate with us or to engage in substantive discussions regarding the terms of our proposal has left us no choice but to take our offer directly to Digital Impact’s stockholders — the owners of the company,” Gupta said in a February 23 statement.
Credit Suisse First Boston, serving as financial advisor to Digital Impact, told the board of directors last week that the offer was inadequate to shareholders from a financial point of view. The board also said in a statement that it believes Digital Impact “can create stockholder value in excess of the offer through the continued execution of the company’s business plan.”
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