Seneca Takes Organic
Remains mum on possible combinations with Agency.com and Red Sky.
Seneca Investments on Friday completed its tender offer for interactive agency Organic, making the San Francisco shop the latest acquisition of the secretive New York-based holding company.
In September, Seneca offered $0.33 for every outstanding share of Organic that it didn’t already own. By that offer’s close on Thursday, that bid had fetched about 10.5 million shares, or 11.8 percent of the company.
Considering that Seneca already possesses 80.9 percent of the company, the move put the holding company in control of the agency’s stock — and, more importantly, its fate. Since Seneca now owns more than 90 percent of Organic stock, shares belonging to investors that didn’t sell are converted into the right to receive $0.33 per share from Organic.
Now, exactly what the tight-lipped Seneca plans to do with Organic remains unclear. Seneca began its effort to buy out Organic four months after announcing a similar purchase offer for Alley-based Agency.com. In October, the holding company completed its offer for Agency.com, and solidified its control of Red Sky Interactive, which had filed for Chapter 11 bankruptcy protection.
Since then, Seneca has combined Agency.com with Red Sky, though the two maintain distinct brands. As of yet, however, no one is talking about what will happen now that Organic is entering the picture. Seneca principal Michael Tierney did not return calls for comment, nor did spokespeople from Organic. Agency.com declined to comment on a potential merger with Organic.
Seneca itself has yet to make a statement to the press about its intentions. However, one of the few clues comes from ad agency giant Omnicom, which is a major shareholder in Seneca. Omnicom previously held stakes in Agency.com, Organic, Red Sky and a number of other interactive firms, including Razorfish.
Following the market downturn, executives at New York-based Omnicom said it was working with Greenwich, Conn.-based venture firm Pegasus Partners to spin off a separate entity that would “consolidate” Omnicom’s interactive agency investments. Seneca Investments was the result.
Whether Razorfish will be a part of any Seneca-led roll-up remains doubtful, however. While it’s been increasing its holdings in Organic and Agency.com, Seneca has been selling off its original 11.5 stake in Razorfish, and now holds only about an 8 percent stake in the firm.
