Intermix Founder Counters News Corp. Offer At Last Minute

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Updated: Brad Greenspan, the disgruntled founder of Intermix Media precursor eUniverse, is leading an investor group called FreeMySpace LLC in a counter-offer for the company, which previously agreed to be acquired by News Corp. for $12 per share. Greenspan, who contends that price underestimates the company’s value, says his group — he’s the only identified investor so far — can offer $13.50 a share to shareholders for up to half of their shares; the shareholders would retain equity value. The Greenspan group also is asking for the Sept. 28 special meeting of shareholders to be moved back. FreeMySpace press release.

The plans sketched out on the group’s site are based on the investor group becoming “a significant shareholder” in Intermix. They would have the company complete its acquisition of the part of MySpace it doesn’t own, then would “transform” the business into MySpace.com, divesting other assets and renaming the company. It would remain a public company. Greenspan, who still owns 10 percent of Internix, told the WSJ: “We were looking to put together a transaction that allowed us to benefit with all the upside we see with MySpace.com. We didn’t want to take that away from shareholders.”

The Freemyspace.com site masquerades as a guerilla effort — complete with erratic capital letters and sloppy punctuation — trying to protect “Free and Independent” MySpace the site from “being sold to and absorbed by corporate Media giant News Corp.” (The press release has “Confidential DRAFT — NOT For Immediate Release” at the top.) The front-page text warns: “If News Corp buys MySpace, we think it will hurt the community and hurt all of Our Spaces!” There’s even a video featuring people identifying themselves as MySpace users speaking against the sale, many of whom seem to think News Corp. is going to start charging for MySpace and don’t seem to know the service already is part of public company. You’d have to read a lot of fine print to realize the site is part of a power play by a substantial shareholder who first argued the whole should be sold for more money.
Earlier this week, Greenspan launched a web site called IntermixedUp, featuring a number of allegations about corporate behavior including insider trading and his claims that the News Corp. deal undervalues the stock while providing a “sweet-heart” deal that benefits insiders. There, he argues that the company should have been auctioned and that shareholders deserved up to $19.50 a share.

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