Flipside said it will start a tender offer by Feb. 20 for Uproar’s outstanding stock, valuing the company at $3 a share. The deal, which has been approved by the boards of both companies, will create a combined company with an expected $70 million in 2001 revenues.
Agnes Touraine, chief executive of Flipside’s parent company Vivendi Universal Publishing, said the combined entity should be profitable by the end of the year. Touraine also noted that current market conditions have made it possible for Flipside to make the acquisition. The company said it expects the tender offer to close by March 31 this year.
Alley-based Uproar has been operating in troubled waters for some time now. In October the company relieved COO Christopher Hassett of his management duties and laid off about 20 percent of its staff. In January, Uproar shut down its online prediction game site called ibetcha.com.
The company also reported third quarter earnings that saw a jump in revenues and an equally dramatic hike in net losses. Even as revenues jumped by some 200 percent in the third quarter, the company posted net losses of $11.9 million (41 cents per share), compared with losses of $8.9 million (38 cents per share) during the same period in 1999.
Uproar shares closed yesterday at $2, well below a 52-week high of $35 and above a yearly low of $0.75. In early morning going shares were trading at $2.91.
Kenneth Cron, CEO of Uproar, could not be reached for comment by deadline. As a result of the acquisition, Cron will join Vivendi Universal Publishing as CEO of Flipside, Inc. Flipside president and COO Emmanuel Schalit will continue in his current role. The combined company will be headquartered here in New York City.
Goldman Sachs & Co. is acting as financial advisor to Flipside, Inc. in connection with the acquisition. Salomon Smith Barney Inc. is acting as financial advisor to Uproar.
Vivendi’s portfolio of entertainment software brands includes Blizzard Entertainment, Flipside.com, Sierra and Universal Interactive Studios.
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