As already mentioned, several law firms investigate the merger announcement. But what's even more interesting: If the merger falls through, INET may have to pay some hefty fines (more about the merger details see here).
I find it curious that an audit member of INET was allowed to receive INET stocks at a time when the merger has already being discussed internally.
Here is the letter Brisco sent to his employees on Sept 20th:
The Merger Agreement contains certain termination rights of Parent (Micro Holding Corp., an affiliate of Hellman & Friedman) and the Company (Internet Brands, Inc.). Upon the termination of the Merger Agreement under certain circumstances, including in order to enter into a definitive agreement providing for implementation of a Superior Proposal, the Company is required to pay Parent a termination fee of $23 million. In addition, if either Parent or the Company terminates the Merger Agreement due to the failure of the Company to obtain the approval of the stockholders to adopt the Merger Agreement, including the Special Stockholder Approval, the Company is required to reimburse Parent for all out-of-pocket costs and expenses, not to exceed $4 million, incurred by it or on its or its affiliates' behalf in connection with the Merger Agreement and the transactions contemplated thereby.
Here is the letter Brisco sent to his employees on Sept 20th:
Dear Internet Brands Team,
We are excited to share with you that today we publicly announced we have entered into an agreement with an affiliate of a leading global private equity firm, Hellman & Friedman LLC (“H&F”), to acquire all of the stock of Internet Brands for $13.35 per share in cash. This price represents a premium of approximately 46.5% over the closing price on September 17, 2010.
Our senior management team has had an opportunity to get to know the H&F team over the past few months and we are confident this partnership will be a positive development for our shareholders, family of employees, customers and communities. H&F has a long history of success working with companies like Internet Brands to achieve significant, profitable growth. H&F recognizes and highly values the strength of our team, our verticals, our position in our marketplaces, and our potential for continued growth and expansion. They are a strong financial sponsor with a long term outlook to support our growth plans.
Our management team will remain in place and we don’t expect much will change in your day-to-day work experience at the Company. We want all of you to know how much we value the work you do and how much you’ve contributed to help make Internet Brands what it is today. It is a direct result of your work that Internet Brands has been acknowledged as a new media leader by H&F. We look forward to continuing our great work together for many years to come.
As a private company, we will have the ability to focus on long term growth initiatives without the pressure of public company expenses, governance, regulatory oversight, and reporting. H&F’s commitment of resources, deep financial expertise, and demonstrated ability to successfully and profitably grow companies in which it invests will all be tremendous assets to our team.
Please note that the transaction is not complete until it is approved by our shareholders, and goes through the customary closing process. We expect this process to conclude by late 2010.
Finally, I want to thank you for all your hard work and commitment to Internet Brands. I hope you are as excited about this new chapter of our Company as we are.
Warmly,
Bob
We are excited to share with you that today we publicly announced we have entered into an agreement with an affiliate of a leading global private equity firm, Hellman & Friedman LLC (“H&F”), to acquire all of the stock of Internet Brands for $13.35 per share in cash. This price represents a premium of approximately 46.5% over the closing price on September 17, 2010.
Our senior management team has had an opportunity to get to know the H&F team over the past few months and we are confident this partnership will be a positive development for our shareholders, family of employees, customers and communities. H&F has a long history of success working with companies like Internet Brands to achieve significant, profitable growth. H&F recognizes and highly values the strength of our team, our verticals, our position in our marketplaces, and our potential for continued growth and expansion. They are a strong financial sponsor with a long term outlook to support our growth plans.
Our management team will remain in place and we don’t expect much will change in your day-to-day work experience at the Company. We want all of you to know how much we value the work you do and how much you’ve contributed to help make Internet Brands what it is today. It is a direct result of your work that Internet Brands has been acknowledged as a new media leader by H&F. We look forward to continuing our great work together for many years to come.
As a private company, we will have the ability to focus on long term growth initiatives without the pressure of public company expenses, governance, regulatory oversight, and reporting. H&F’s commitment of resources, deep financial expertise, and demonstrated ability to successfully and profitably grow companies in which it invests will all be tremendous assets to our team.
Please note that the transaction is not complete until it is approved by our shareholders, and goes through the customary closing process. We expect this process to conclude by late 2010.
Finally, I want to thank you for all your hard work and commitment to Internet Brands. I hope you are as excited about this new chapter of our Company as we are.
Warmly,
Bob
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