Posted by Azam Editorial Team as Performance Marketing
Some shareholders in IBG, parent company of AffiliateFuture, have expressed concern about the decision to effectively sell the network to direct marketing company TMN Group (formerly TheMutual.net). The reason is because the acquisition values each IBG share at a miserable 12.75 pence and the whole of IBG at a mere £9.84 million.
This compares to a share price of 28 pence six months ago on 20 June, 2007 and talk of IBG shares looking to hit the 40 pence mark.
“I think what has happened over the past 6 months is a bloody disgrace”, says a shareholder who goes by the name Omlaysause on the ADVFN.com stockmarket forums. “First off we get that ridiculous RNS saying we MAY have a problem with profits and then to say it could be effected for 2 years, which as we all know, killed the SP there and then. Coupled with the strategic review which turned out to be a complete waste of time. We are then told, don’t worry lads, we’ve got some great ideas and you’ll all reap the benefits if you stick around for the next 2 years. Then a few months later, do you know what, we’re just going to sell up with no benefit to the IBG shareholders in the deal, it’s a simple swap of IBG to TMN.”
Most IBG shareholders have expressed similarly negative views on ADVFN.com as they’ve felt that, by selling when the share price is at its lowest point in years, and by selling without a premium, they’ve been let down.
However, some of the biggest losses will be incurred by IBG Directors who hold substantial holdings in the company. As recently as 7 August 2007, Non-Executive Director Nicola Costa and CEO Maziar Darvish bought £99,755.84 of shares between them at around 16.5p.
The buyout/merger ends a year which has seen a number of affiliate networks and what could be more or less described as affiliate companies come together. Examples of notable tie-ups include TradeDoubler and The Search Works, Buy.at and Lightstate, Linkshare and TrafficStrategies.com as well as CauseLoyalty.com and AffiliateFuture and NetFreeStuff.
The two CEOs, Maziar Darvish and Mark Smith, are both astute businessmen and will have made the decision with the best interests of their ‘babies’ at heart: the greater size will bring cost savings and there will be the potential to cross-sell services.
With email marketing companies always hungry for campaigns and with affiliate networks always desperate for means to market their advertisers, this could be the perfect marriage of convenience… even if there is discontent about the amount of dowry paid.
You can read the full buyout/merger statement below:
“TMN – Nil Premium Merger with IBG
14 December 2007
Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction
RECOMMENDED OFFER BY TMN GROUP PLC FOR INTERNET BUSINESS GROUP PLC
The Boards of TMN Group plc (‘TMN’) one of the UK’s premier online direct marketing groups, and Internet Business Group plc (‘IBG’), the online advertising and media specialist, are pleased to announce that they have reached agreement on the terms of a recommended proposal for TMN to acquire the entire issued and to be issued share capital of IBG by way of a share-for-share exchange.
Mark Smith, CEO of TMN, said:
‘Bringing the two Groups together, with their obvious synergies and exciting market potential, represents an opportunity to continue our strategic focus on building an Enlarged Group providing a broad range of high quality, online advertising, marketing and research services.
The market in which we operate continues to grow and present new opportunities, and TMN will continue to evolve to meet the needs of the market. We see excellent synergies between the businesses and feel that this is a significant step in achieving our long-term vision.’
Maziar Darvish, CEO of IBG, said:
‘We believe that as part of a larger integrated group, we will be better positioned to exploit the significant opportunities within the marketplace.
The structure of the deal and the combination of two such highly complementary businesses is expected to enhance value for shareholders in the medium to long term. With these factors in mind, the Directors unanimously recommend that the
shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting.’
Investec is acting as sole financial adviser and corporate broker to TMN. Strand Partners is acting as financial adviser to IBG. St Helen’s Capital plc is acting as corporate broker to IBG.”