InfoUSA Inc. condemned Digital Impact’s rejection of a cash offer for Digital Impact’s stock, saying that Digital Impact’s board of directors was “not seriously committed to realizing stockholder value.”
On Monday, Digital Impact’s board of directors called the $2 per share offer “inadequate,” and said that it did not “reflect the underlying value of the company.”
“When we made our offer, the share price was $1.40,” infoUSA chairman and CEO Vinod Gupta said in an interview. “The board looks stupid in saying $2 per share is not enough.”
Digital Impact’s Monday rebuff of infoUSA offer contained a “poison pill” provision designed to counter hostile takeovers. According to a newly adopted stockholder rights plan, if a third party acquires more than 15% of Digital Impact’s outstanding shares, all shareholders – excepting the third party acquiring the 15% or more stake -- would receive one additional share of the San Mateo, CA-based firm’s stock for each share owned. The rights plan covers all stockholders of record as of March 16.
In the statement, Gupta said that Digital Impact’s “management appears to be lining its own pockets at the expense of the company's stockholders."
He also claimed that "a standalone model for Digital Impact at this point is doomed to continued mediocrity due to intense competitive pressure and excessive costs involved in staying public for a small company the size of Digital Impact."
InfoUSA’s offer is scheduled to expire on March 23. At that time, Gupta said, infoUSA would know how many shareholders were interested in the $2 per share offer, and what percentage of Digital Impact’s stock it could control.
“These shareholders want out,” Gupta said.
Digital Impact did not return a call by deadline.
