Encore Ups Offer for LifeMinders
The bidding war heats up, as an unsolicited rival offers a potentially sweeter deal for the e-mail marketer's technology.
Lanham, Md.-based affinity group marketer Encore Marketing is increasing its bid for troubled online direct marketer LifeMinders.
Last week, Encore went public with its unsolicited counter offer for the company’s assets, which represented a major challenge to Cross Media Marketing’s earlier bid.
In July, New York-based Cross Media offered $68.1 million in cash, or both cash and stock, for LifeMinders’ outstanding shares — either $2.56 in cash, or $0.84 in cash and $1.72 in stock of the merged corporation. However, Cross Media said that it would pay a maximum of $24 million in cash to shareholders — meaning that it wouldn’t honor any requests for cash beyond that, and would issue stock instead.
In its earlier bid, Encore offered $1.086 in cash and $1.225 worth of stock in the merged corporation for each share of LifeMinders’ common stock. Altogether, Encore would be doling out $30 million in cash to shareholders, at a higher per-share premium than Cross Media’s offer would.
Now, the new offer from the company raises the stakes even higher: $1.262 per share in cash and $1.049 in stock — a payout of approximately $64 million, $34.9 million of which is in cash.
“We believe that this proposal to LifeMinders further enhances the superiority of our bid to any the company has on the table by providing shareholders with significantly more cash, which we understand is a desire of the shareholders,” said Encore president Steve Klein.
Meanwhile, Klein reiterated a hope to make the counter offer legitimate by meeting with LifeMinders’ executives and its board of directors — which had rejected the company’s previous bid, but released a statement once Encore had gone public with the proposal, saying that LifeMinders would “revisit” the offer.
“Our hope is that the LifeMinders Board of Directors would now direct management to meet with us and seriously consider our offer,” Klein said. “We are fully confident that if we were able to meet with the management of LifeMinders we would compare very positively with Cross Media and their bid.”
Winning the support of LifeMinders’ board would be a critical step toward legitimizing Encore’s offer to shareholders. Without the approval, Encore could face a nasty hostile takeover effort, although it has not signaled its intent to go forward with such a bid.
In either event, should Encore be successful in the acquisition, the firm said that the new company — which will be called LifeMinders — would use LifeMinders’ email technology in conjunction to its own telephone, direct mail and direct response television affinity group marketing. The firm runs programs including Shopper’sDiscount, PreferredTraveler, and Home & Garden Savings Club.
Additionally, Encore said it would promote its affinity clubs to LifeMinders’ membership, and try to encourage former members of the company’s email newsletters to opt back in.
