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Greenfield 'Undervalued' Claim Investors
The proposed $426m sale of Greenfield Online to media and communications investment firm the Quadrangle Group is being hampered by complaints from investors Springhouse Capital and Pennant Capital that the agreed sum undervalues the company.
News of the sale was first announced in mid June, when Quadrangle agreed to acquire all Greenfield's outstanding stock for $15.50 a share.
However, Springhouse (which holds 8% of stock) believes that the figure does not reflect the appropriate value of Greenfield's two business segments - online surveys and comparison shopping - and cash, which together Springhouse values at at least $25 per share.
The investor says it wants Greenfield's Board to conduct an exhaustive auction and actively solicit alternative proposals.
Pennant Capital, which holds 7.7% of Greenfield stock, agrees that the offer is 'inadequate'. In a letter, which was disclosed in a filing with the Securities and Exchange Commission, Pennant called for Greenfield to execute a 'full auction process' with a wide range of both financial and strategic buyers who could be interested in acquiring the whole company.
The firm said that potential buyers of either of the company's two distinct segments should be 'aggressively pursued' as part of the auction process. It asserts that this will enable shareholders to objectively evaluate alternatives to the Quadrangle bid, such as selling only one of the segments and remaining a public entity.
Under the terms of the Quadrangle agreement, Greenfield has until 4 August to solicit alternative proposals. Should Greenfield accept a 'superior offer', it could incur a breakup fee of between $5m and $12.5m.
Web sites: www.greenfield.com , www.ciao-surveys.com and www.quadranglegroup.com .
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