TMP Worldwide was putting the finishing touches on its plan to bring online career site HotJobs
into its corporate fold when Yahoo
horned in.
After all, it had been six months since TMP, whose flagship property is Maynard, Mass., job board Monster.com, proposed a stock swap
worth $460 million. And though the purchase price slipped to $366 million because of a slump in the company’s share price, there was no sign of the deal being
derailed.
Enter Yahoo. The San Jose, Calif., Internet behemoth has made an aggressive bid of $436 million ($203 million of that in cash) for HotJobs. The bid, proposed
during the usually dead holiday season, caught many by surprise, although insiders said the company has coveted HotJobs since 1999 both for its ad business
and its foothold in the enterprise market.
TMP has issued a terse statement, that did not up the ante, but appealed to HotJobs stakeholders not to be wooed by Yahoo.
“Based on TMP Worldwide’s industry leading position and the anticipated synergies, TMP believes that this transaction, which is expected to be tax-free, is in the
best interest of HotJobs shareholders,” it reads.
Some analysts were never hot on TMP’s interest in New York-based HotJobs to begin with.
“We would rather TMP’s management focus on managing Monster.com than on integrating HotJobs, and we are not particularly concerned by this turn of events,”
Goldman Sachs’ (GS) researchers wrote in a note to investors. Even without HotJobs, which had $130 million in sales last year, GS believes TMP will hit its 2002
financial targets and remain the market leader in online job services.
HotJobs’ board of directors has given permission for executives to discuss Yahoo’s proposal while saying the TMP merger agreement stands — at least for now. If
the bid does fall through, TMP is entitled to a $17 million breakup fee under the merger agreement, GS noted.
So with TMP holding pat, the outcome of the deal hinges on HotJobs decision-makers. Analysts at Jupiter Media Metrix, believe that’s the smart play.
Aram Sinnreich, a Jupiter analyst, said, “While we commend (Yahoo’s) overall strategy of building paying relationships with customers, there are better ways to spend money in this challenging economy. Either way, Monster.com wins because they will own
this market in the long term.”
News of maverick bid sent HotJob shares soaring 63 percent at midday, while Yahoo and TMP shared dipped 6 percent and 5 percent, respectively.
