Answers.com Board Rejects Speculative Last-Minute Acquisition Proposal by Brad Greenspan
11 4월 2011 - 8:58PM
Business Wire
Answers.com, (NASDAQ: ANSW), creators of the leading answer
engine Answers.com®, today announced that its Board of Directors,
advised by its independent financial and legal advisors, has
concluded that the proposed transaction with AFCV Holdings, LLC
remains in the best interests of Answers’ stockholders and
unanimously reaffirmed its recommendation that stockholders vote to
adopt the merger agreement between Answers.com and AFCV Holdings,
LLC, a portfolio company of growth equity investor Summit
Partners.
Answers.com also announced that it had received over the weekend
an unsolicited letter from Brad Greenspan, purporting to represent
Social Slingshot Pte Ltd. and eJuggernaut LLC. The letter included
a speculative proposal, subject to numerous contingencies and
uncertainties, to acquire a controlling interest in Answers.com,
which the Board rejected. The proposal purports to offer to acquire
the Answers.com 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. In making its
determination to reject the offer, the Board concluded that the
proposal was not credible. The Board also found that the proposal
was not likely to result in a transaction that is superior to the
definitive merger with AFCV, which would provide Answers.com
stockholders with the opportunity to receive $10.50 in cash upon
consummation of the merger.
Answers.com’s CEO, Robert Rosenschein, commented, “Mr.
Greenspan’s proposal lacks credibility. Our Board of Directors
determined that there is substantial doubt that the proposal could
be financed or consummated, and that it would in any event entail
substantial delays, posing risk for the company and its
stockholders. Our Board continues to recommend that our
stockholders vote in favor of the pending transaction with AFCV
which, subject to approval by our stockholders, can be consummated
in a matter of days.”
In reaching its conclusion to reject Mr. Greenspan’s proposal,
the Board noted, among other considerations, the following:
- According to its website,
socialslingshotfund.com, Social Slingshot is a S$5 million
Singapore-based incubator fund; Answers.com was unable to locate
any publicly available information for eJuggernaut;
- The proposal does not identify any
specific financing sources or commitments (binding or otherwise),
nor does it identify the amounts, terms or conditions of any
financing, and refers only to “verbal indications of interest for
capital commitments”;
- The proposal expresses an intention to
secure a $55 million loan from a major US bank, but does not
identify the bank, explain how the company could support this
leverage or the terms of the financing or how this financing could
be obtained;
- The proposal is subject to due
diligence, the registration of securities with the Securities and
Exchange Commission and other possible delays;
- Because of the substantial uncertainty
as to the time that would be required to consummate the proposed
transactions, the company and the transaction would be subject to
financial and business risks. (By contrast, subject to the few
remaining customary conditions contained in the AFCV merger
agreement, the merger with AFCV would likely be consummated
promptly following the vote of stockholders to adopt the merger
agreement);
- The proposal purports to pay less for
the Answers.com preferred stock than for the common stock, despite
the preferred stockholders’ holding approximately 25% of the
Answers.com voting power, and there appears no reason why the
preferred holders would accept the proposal;
- The proposal was delivered to the
company’s chief executive officer over a weekend less than three
business days before the meeting scheduled to vote on the merger
transaction with AFCV, despite the merger with AFCV having been
announced over two months ago, which suggests a lack of
credibility. No other information has been provided to the company
other than the proposal letter; and
- Mr. Greenspan does not appear to have
any successful experience with leveraged acquisitions, and has been
involved in at least two failed acquisition attempts, further
eroding the credibility of his offer.
Adjournment of Stockholders Meeting
Answers.com also announced that, in order to permit its
stockholders additional time to reflect upon and to react to the
Board’s response to Mr. Greenspan’s letter, it 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, at the offices of Kramer Levin Naftalis & Frankel
LLP, 1177 Avenue of the Americas, New York, New York 10036. The
meeting is currently scheduled for Tuesday, April 12, 2011 at 10:00
a.m. Eastern Time.
Other Information
Answers.com has filed a current report on Form 8-K, which
includes additional information concerning the proposal, and the
Board’s determination to reject the proposal, as well as the full
text of Mr. Greenspan’s proposal letter. Copies of this document
are available at the Securities and Exchange Commission’s website
at www.sec.gov and from representatives of Answers.com as described
below.
About Answers
Answers Corporation (NASDAQ: ANSW) owns and operates
Answers.com, the leading Q&A site. Answers.com is a
community-generated social knowledge Q&A platform, leveraging
wiki-based technologies. Through the contributions of its large and
growing community, answers are improved and updated over time. The
award-winning Answers.com also includes content on millions of
topics from over 250 licensed dictionaries and encyclopedias from
leading publishers, including Houghton Mifflin, Barron's and
Encyclopedia Britannica. The site supports English, French,
Italian, German, Spanish, and Tagalog (Filipino). (answ-g)
Answers.com’s SEC filings can be found at
http://ir.answers.com/sec.cfm.
Answers.com is a trademark of Answers Corporation. All other
marks belong to their respective owners.
Additional Information and Where to Find It
Answers.com has filed with the Securities and Exchange
Commission a definitive proxy statement and other relevant
materials in connection with the merger. The definitive proxy
statement has been sent to the stockholders of Answers.com. Before
making any voting decision with respect to the merger, stockholders
are urged to read the proxy statement and the other relevant
materials because they contain important information about the
merger. The proxy statement and other relevant materials and any
other documents filed by Answers.com with the SEC, may be obtained
free of charge at the SEC's website at www.sec.gov or at Answers'
website at http://ir.answers.com/sec.cfm. In addition, stockholders
may obtain free copies of the documents filed with the SEC by
contacting Okapi Partners at (212) 297-0720.
Participants in the Solicitation
Answers.com and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of Answers.com in connection with the merger.
Information about the directors and executive officers of
Answers.com is set forth in its proxy statement on Schedule 14A
filed with the SEC on July 27, 2010 and Answers.com's Annual Report
on Form 10-K filed on March 17, 2011. Additional information
regarding the interests of participants in the solicitation of
proxies in connection with the merger is included in the definitive
proxy statement filed by Answers.com with the SEC.
Forward-looking Statements
This press release contains statements that are forward-looking
statements as defined under the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties with respect to the consummation of the
transaction. These include the risks and uncertainties regarding
the transaction described in Mr. Greenspan’s proposal letter as
discussed above, and the possibility that, notwithstanding the
Board’s determination that the proposal is not reasonably likely to
become a Superior Proposal, a transaction on the terms described in
the proposal letter could be consummated. They also include risks
and uncertainties regarding consummation of the merger with AFCV,
including the failure to obtain the required approval of
Answers.com stockholders and certain adverse changes to the
business of Answers.com, including as a result of factors detailed
from time to time in reports filed with the SEC; the failure of the
committed financing for the transaction; and potential litigation
risks.
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