More NewsShareholder Sues CMGI Over Flycast, Adsmart Acquisitions

Shareholder Sues CMGI Over Flycast, Adsmart Acquisitions

CMGI has been slapped with a shareholder lawsuit that alleges the companyacted in bad faith when it agreed to have one portfolio company, Engage Technologies, acquire two others -- FlycastCommunicationsand Adsmart Communications.

CMGI (CMGI) has been slapped with a shareholder lawsuit that alleges the company acted in bad faith when it agreed to have one portfolio company, Engage Technologies (ENGA), acquire two others — Flycast Communications (FCST) and Adsmart Communications.

The holding company disclosed the lawsuit, filed on March 16 in Delaware Chancery Court, in papers filed with the Securities and Exchange Commission in relation to its latest quarterly report.

The suit specifically names companies and their executives — CMGI, Edward Bennett, Christopher Evans, Craig Goldman, Andrew Hajducky III, Frederic Rosen, Paul Schaut, David Wetherell and Engage Technologies Inc. In the SEC filings, CMGI said that it believes the suit is without merit and that it, “intends to contest the claims vigorously.” The companies declined to comment further.

Published reports identified the plaintiff as Doris B. Sollod, a shareholder in Engage who feels that, because that company’s stock has soared since the purchase agreement, the buying price (which will be paid in stock) is now too high.

On January 20, Engage agreed to acquire Flycast and Adsmart for 32 million shares. The deal was valued at about $2.4 billion at a $76 per-share price. Based on yesterday’s closing price of $126, the deal would be worth more than $4 billion.

“As a result, (CMGI) will reap wrongful windfall profits on the intended sale of Flycast to Engage, (and) Flycast is not worth $5 billion or anywhere near that sum,” Sollod says in the suit, according to Bloomberg News.

The suit reportedly asks a judge to stop the sale and award damages and fees.

Related Articles

GDPR: The role of technology in data compliance

Data & Analytics GDPR: The role of technology in data compliance

3w Clark Boyd
What companies can learn from the We-Vibe lawsuit about the Internet of Things

Legal & Regulatory What companies can learn from the We-Vibe lawsuit about the Internet of Things

8m Al Roberts
Has advertising arrived on Google Home?

Media Has advertising arrived on Google Home?

8m Al Roberts
Is Twitter slowly dying?

More News Is Twitter slowly dying?

9m Al Roberts
FedEx launches fulfillment service to take on Amazon

Ecommerce FedEx launches fulfillment service to take on Amazon

9m Al Roberts
Target is the top retail digital marketer, so why is it struggling?

Ecommerce Target is the top retail digital marketer, so why is it struggling?

8m Al Roberts
YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

More News YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

9m Al Roberts
YouTube is getting rid of 30-second unskippable pre-roll ads

Ad Industry Metrics YouTube is getting rid of 30-second unskippable pre-roll ads

9m Al Roberts