iVillage has called for a shareholder meeting on May 12, and has filed a detailed SEC document about its acquisition with NBC, including the term sheet and all the drama that happened during the bidding process.
The bidding was a long drawn out process, spread over nine months…it started in July last year. In the end, after multiple rounds of discussion, 12 companies were interested in acquiring iVillage, and that of course included NBC. After the first round, six companies remained as serious bidders, and that included Hearst, an existing 25 percent shareholder of iVillage.
Here’s what happened in December last year: “Ultimately, five of these companies, including NBC Universal and Hearst, submitted initial indications of interest…NBC Universal’s initial indication of interest stated that it would be prepared to pay between $9.00 and $10.00 per share in cash for 100% of iVillage. Hearst’s initial indication of interest stated that it would be interested in purchasing all of the equity of iVillage at a purchase price between $8.00 and $8.50 per share. The other indications of interest included per share values ranging between $8.00 and $9.25 per share.”
Following that, the board decided to ask the bidders that $8.50 was too low, and it would consider only bids higher than $9 range. Hearst bailed out after this, but was interested in remaining a joint stockholder, if possible. After that, here’s what happened:
— Hearst’s ownership, ultimately, was a side in the thorn of these acquisition discussions (my paraphrasing), but after back and forth, couple of the serious bidders dropped out because of these complications with Hearst.
— By the end of it, iVillage did not get the range it wanted, above $9 a share, and NBC came back with a final proposal of $8.50 per share.
— Right until things were final, besides NBC, there was one other very willing (and unnamed) bidder, but that bidder wanted to solve out the Hearst issue, and that didn’t happen.
— Feb 24-27th were probably hellish days for iVillage, Hearst and NBC execs and board..that’s when the most intense negotiations were happening.
Some other details:
— CEO Doug McCormick will receive a payment of $1.78 million as a result of the accelerated granting and vesting of an aggregate of 210,000 restricted stock units.
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