Banking & Finance

M&A Watch: Questioning The Rival Deal (ANSW)

Internet acquisitions have been few and far between of late when it comes to public companies. Corporation (NASDAQ: ANSW) may still be worth more… Or it may not.  The question is whether the “may” is based upon anything real.  The company shareholders are currently slated to receive $10.50 per share in the existing merger with the Summit Partners affiliate AFCV Holdings, LLC.  Word came out today that the company effectively killed a last-minute rival offer from Brad Greenspan, which supposedly valued the company at $13.50 per share plus extra for the warrants.

The company has advised its stockholders to vote to adopt the existing merger agreement between and AFCV Holdings.  It disclosed that it received an unsolicited letter from Brad Greenspan over the weekend that was purportedly representing Social Slingshot Pte Ltd. and eJuggernaut LLC.

What is telegraphing is that it acknowledged the receipt of a letter but it does not believe the offer is credible.  It noted, “The letter included a speculative proposal, subject to numerous contingencies and uncertainties, to acquire a controlling interest in, which the Board rejected. The proposal purports to offer to acquire the common stock outstanding for $13.50 per share in cash, plus A and B warrants to acquire common stock at exercise prices of $23.50 and $46.50, respectively.”  The company even listed many concerns and questions about the offer in its press release this morning.

The company intends to adjourn the special meeting of stockholders to vote on adoption of the merger agreement with AFCV immediately after it is commenced and to reconvene the meeting at 10:00 a.m. Eastern Time on Thursday, April 14, 2011.

Even for a buyout target, is small with a $85 million market value.  It offers no traded stock options and the trading volume has been rather light.

It was just last week that proxy firm ISS recommended that shareholders vote for the existing AFCV offer on the table.  The merger was give regulatory approval just a month ago but a firm called Osmium Partners said the offer grossly undervalued as recently as February.

Generally speaking, these last-minute tenders fail to gain much traction.  It is also too know who really sent the offer without the details, even if the name Brad Greenspan (the MySpace Brad Greenspan) is well-known.  If Wall Street or Main Street believed the offer, shares would be higher than they are.  The stock has not eve risen above this $10.50 hurdle and trading volume has remained very light so far.