Ideation Acquisition Corp. (AMEX: IDI) has been freed up to become SearchMedia, as expected. The special purpose acquisition company, or SPAC, issued a release noting that its shareholders approved all of the company’s proposals related to the acquisition of SearchMedia International Ltd. As we have noted, investors and traders were using Ideation as a cheap backdoor play into the aspect of advertising in China, very similar to Focus Media Holding Ltd. (NASDAQ: FMCN), the larger pure-play Chinese advertising stock, and to the smaller players there called VisionChina Media Inc. (NASDAQ: VISN) and AirMedia Group Inc. (NASDAQ: AMCN).
Shareholders representing 82.9% of the outstanding shares approved the business combination in a vote. Fewer than 0.4% of the represented shares elected to convert their shares to cash. Ideation will change its name to SearchMedia Holdings Limited and its common stock, units and warrants will continue to trade on the NYSE Amex under the ticker symbols IDI, IDI.U, and IDI.WS, respectively.
SearchMedia operates a multi-platform outdoor billboard and in-elevator advertising networks in China. Its current network consists of over 1,500 high-impact billboards with over 500,000 square feet of surface display area and one of China’s largest networks of in-elevator advertisement panels consisting of over 170,000 frames in 57 cities throughout China.
The transaction is expected to close on or about October 30, 2009, subject to the satisfaction or waiver of all closing conditions. We are seeing a sell-the-news reaction although only by 1.4% to $8.52. Ideation’s, or SearchMedia’s, 52-week trading range is $6.70 to $8.73.
JON C. OGG
OCTOBER 27, 2009