How Audible Sold Itself To Amazon; No Competing Bids; Price Came Down From Earlier Hopes

Audible (NSDQ: ADBL), the spoken word company which is in the process of being bought by Amazon.com (NSDQ: AMZN), has filed with SEC on a timeline of how the process of its sale went through. The company announced last week that it was selling to the book retailer for $300 million.

According to the filing, the process started in March 2007 with Audible’s board agreeing to go look for buyers. By April it has hired Allen & Co to manage the process. From March through the end of July, Allen approached 12 potential acquirers, and informed them that an offer of $12.50 per share would likely represent an acceptable offer price. No acquisition proposals were received, and communications with these potential acquirers did not progress enough to justify allowing these parties to commence a due diligence review of Audible, the filing said.

It was then that Don Katz, the CEO of Audible met Jeff Bezos in July last year, and then brought up the possibility on Amazon purchasing the shares of common stock held by the Apax Funds (major investor in the firm), as well as the possibility of a larger strategic business relationship.

Communication went back and forth between the two parties, and Amazon initially came in with a lower bid of $11 a share, which after more negotiations was raised to $11.50 per share. The deal was signed on Jan 30th and the official announcement came out Jan 31st.

Breakup fee if the deal doesn’t go through: Audible may have to to pay to Amazon up to $3.5 million for the expenses incurred and a termination fee of $10 million.

Allen & Co’s fee with this transaction: about $3.6 million.

From reading the document, it seems like Apax has been pressuring Audible to sell, or at least wanted to sell its stake in the company. We reported on Apax’s intention to sell in December.

We forgot to add this disclaimer earlier, as the commenter below so caustically points out: Disclaimer: Our investor Alan Patricof served as one of Audible

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