The board of directors of San Francisco-based interactive shop Organic
recommended that stockholders agree to sell their shares
to Seneca Investments — paving the way for a buyout and potentially, a
merger.
In September, New York-based Seneca, a holding company set up in a joint
venture between ad agency giant Omnicom and venture capital
outfit Pegasus Partners, offered $0.33 in cash for each publicly-held share
of Organic.
The unanimous approval by Organic’s board, and a special board committee
comprised of independent directors, means the firm is one step away from
becoming another Seneca-owned interactive agency.
Through its association with Omnicom, Seneca owned a 22 percent stake in
the firm. Earlier this month, Organic’s founding executives sold their
shares to Seneca at about $0.16 per share, giving the company control of
about 80.9 percent of Organic’s outstanding shares.
To complete the buyout, Seneca now needs only the commitment of the
owners of 9.1 percent of the company’s outstanding shares. Should Seneca
gain control of 90 percent of Organic’s stock, every remaining share will be
converted into the right to receive $0.33 in cash.
As a result, the stage is set for Organic to become a sibling of
cross-country rival Agency.com, which Seneca bought out in August. (Seneca
also merged Red Sky Interactive into Agency earlier this year.)
Whether Seneca’s buyout will ultimately result in a merger of New
York-based Agency and Organic remains unclear. Executives at Seneca, which
was formed to consolidate Omnicom’s investments in several public and
private interactive agencies, have said little about their intentions, and
through spokespeople, have routinely declined to speak to the media.
Also unclear is whether Razorfish will be included in
Seneca’s roll-up. The holding company maintains about an 8 percent stake in
the firm, though since May it has been steadily reducing its ownership, down
from its original 11.5 percent stake.
