E-mail marketer NetCreations Wednesday said that it is gearing up to go
forward with a planned merger with an Italian Internet firm, making peace
with former suitor DoubleClick and laying groundwork for a shareholder vote.
Spokespeople from NetCreations said it has paid its dues — to the tune
of $8.6 million in cash — to DoubleClick after their failed merger, as part
of an existing agreement between the two companies. That fee ultimately
will include $850,000 to $900,000 in expenses, as stipulated in the merger
agreement. Typically, those costs cover printing and consultation fees.
NetCreations also said it plans to reschedule its annual shareholder
meeting. The New York-based company’s annual shareholder meeting, scheduled
for Dec. 28, 2000, was to be used to vote on a merger with Alley advertising
giant DoubleClick, which announced its intention to purchase NetCreations in
a cash-and-stock deal valued then at $191 million.
But that was until last week, when an unnamed firm made a cash offer
topping DoubleClick’s bid — which had lost much of its leveraging power due
to market contractions.
That mystery suitor was unveiled Tuesday morning as Italian portal and
phone directory publisher SEAT Pagine Gialle, which aimed to broaden its
recent efforts to move into international marketing services.
Under SPG’s offer, each outstanding share of NetCreations common stock
would be converted into the right to receive $7.00 in cash. DoubleClick had
offered 0.41 shares of DCLK stock for every share of NetCreations. At the
time, that represented about $12.15 per share, well over NTCR’s price at the
time. But after several tough months for the New York ad serving and
technology firm’s stock price, the value of 0.41 of a share of DoubleClick
dropped to $3.76, while NTCR was trading at $6.65.
Now, NetCreations will postpone its shareholder meeting to give it time
to prepare, file and distribute proxy voting materials to shareholders to
approve the new merger offer by SPG.
Barring another outside bid, NetCreations anticipates the deal going
through without a hitch. The company’s two largest shareholders are its
co-founders, chairman and chief executive officer Rosalind Resnick and board
member Ryan Druckenmiller. Together, the two control about 65 percent of
NTCR’s outstanding common stock, and have pledged to approve the merger,
which requires a two-thirds (or 66.6 percent) approval margin.
NetCreations did not announce a date for the shareholder meeting, but
reiterated that it expects to close the merger by first quarter, 2001.