NEW YORK, August 17—Video public relations specialist Medialink Worldwide, facing the possibility of a hostile takeover by PR Newswire parent United Business Media, has implemented a preferred stock rights plan “designed to protect and maximize the value of the shareholders’ interests in the event of an unsolicited attempt… to take over the company on terms not approved by the board of directors.”
The United Business offer of $5 a share, which values Medialink at around $29 million, represents a 50 percent premium over Medialink’s Monday closing price of $3.35 a share, and prompted a 30 percent increase in Medialink’s share price. The bid is considerably lower than Medialink’s $7.63 52-week high.
According to UBM executive director Charles Gregson, “The capabilities of PR Newswire and of Medialink are highly complementary, and… the transaction we have proposed… is the most desirable route among many. As such, while we would prefer to enter into discussions that would lead to a formal merger agreement with Medialink, we are prepared to consider a range of steps should Medialink’s board choose not to recognize the value of our all-cash, premium offer.”
Medialink responded with a statement that it would review the offer “in due time,” and then announced poison pill provisions, claiming “takeover attempts frequently include coercive tactics to deprive the company’s board and its shareholders of the ability to maximize shareholder value.” The preferred stock rights plan goes into effect only if an outside acquired 15 percent of more of the company, and entitle holders to purchase either Medialink stock or that of an acquiring entity at half the market value.
UBM said it had anticipated such a move, and that it was confident its offer would be seen to be in the best interests of the company’s shareholders.
The company also said that if the takeover is successful it will merge Medialink into its PR Newswire operation. Says PR Newswire chief executive Charles Morin, “Over the past decade, PR Newswire has experienced exceptional financial and operational growth as it has established itself as a leading provider of the most technologically advanced and widest range of communications services to public relations and investor relations professionals globally.
“These customer offerings have been evolving beyond traditional text-based distribution, and now include a range of multimedia capabilities, such as audio and video webcasting, interactive polling and Internet monitoring. After evaluating a range of strategic options that would enable PR Newswire to enter the video news release segment… we have identified a potential merger with Medialink as the most attractive alternative.”
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