Video search company blinkx make second bid to acquire MIVA
Digital media company MIVA receive second acquisition bid from blinkx for 65c per share less
Video search engine
blinkx has announced its
revised offer to purchase digital media company
MIVA, by way of a letter to MIVA?s board of directors.
Blinkx first made
an offer to MIVA in August 2008 for a cash consideration of $1.20 per share, which at the time was over 35% of MIVA?s closing stock for the month prior to the offer. Two months later, not having come to an agreement on the sale terms, blinkx
withdrew their offer.
At the time, blinkx?s founder and chief executive officer Suranga Chandratillake said, ?It is unfortunate for MIVA? shareholders that despite our best efforts, MIVA?s Board and management have not embraced our proposal to combine our companies. The large premium offered in our initial proposal is even more significant today in light of MIVA?s second quarter earnings miss. By choosing not to engage in substantive discussions in any material respect and an agreement with blinkx, MIVA Board and management, in our view, have failed to give due consideration to a transaction that had a uniquely attractive opportunity, particularly in light of several challenges MIVA face in the near term.?
Due to the current market conditions, and what blinkx call ?issues in the MIVA business? the new offer of $0.55 per share now represents a 108% premium above MIVA?s closing share price on 18 November ? which is a 39% premium for the month prior.
Chandratillake comments on the new offer, "When we first publicly proposed to acquire MIVA in August 2008 we were clear in our public and private communications that we could fund the acquisition through available cash resources. We can still do so today, regardless of MIVA's significantly reduced cash position, so let there be no confusion as to the source of capital for this deal."
He continues, "Given the strength of our financial results last week, it's clear that certain emerging sectors of online advertising, specifically video, continue to thrive. We believe there is significant value in the MIVA business and real potential to increase that value for shareholders through the proposed transaction. However, because of MIVA's continued loss-making performance and rapidly declining cash position, time is of the essence. We trust that the MIVA Board will recognize that expediency is critical to realizing the benefits of this opportunity and providing stability to MIVA shareholders, customers and employees."
If successful in its bid, blinkx aims to merge blinkx video search technology with MIVA?s distribution network and improve MIVA?s platform through scalable technology. By doing this, blinkx hopes to monetise traffic generated from MIVA?s search ad network, and introduce a new revenue stream through MIVA?s existing toolbar network. Blinkx would also aim to enhance MIVA?s consumer websites by integrating its video technology and advertising platform.
Blinkx conclude the statement by stating they are prepared to deliver a merger agreement to MIVA following receipt of the official offer, and begin discussions immediately.