Monster Worldwide-MediaNews Battle Intensifies Before Sale
Zacks Investment Research | Oct 02, 2016 10:29PM ET
Ever since Monster Worldwide Inc. (NYSE:MWW) announced its takeover by Dutch firm, Randstad, it has been facing opposition from its biggest shareholder, MediaNews.
The battle has intensified with MediaNews, which holds 11.6% stake in Monster, planning to replace the board by electing seven new members in a bid to thwart the deal. MediaNews plans to file a preliminary consent solicitation statement with the SEC to execute a board reshuffle. If it succeeds in ousting the present board, MediaNews wants Daniel W. Dienst, a former executive of Martha Stewart Living Omnimedia Inc, a unit of Sequential Brands Group, Inc. (NASDAQ:SQBG) , to serve as the interim CEO till a new CEO is selected.
In a letter dated Sep 30, MediaNews said that it has “no confidence” in the existing board and CEO owing to their repeated failures to take correct “strategic and operational decisions to maximize value for shareholders”. However, Monster, in response, has maintained that MediaNews’ claims are “flawed”. Further, it states that MediaNews is asking shareholders to reject the proposal without any solid alternative. Per the deal with Randstad, Monster’s shareholders will get $3.40 per share, representing a 22.7% premium to Monster's closing stock price on Aug 8, 2016. Monster continues to endorse the deal to shareholders.
On Aug 9, 2016, Monster Worldwide announced that Amsterdam-based, Randstad will acquire its assets for about $429 million or $3.40 per share in cash. At that time, MediaNews, while disclosing an 11.6% stake in Monster, urged the other shareholders not to approve the merger as the deal represented “the textbook definition of selling at the bottom." It suggested that Monster should “explore all strategic options, including an auction, a review of business operations and/or a restructuring.”
Monster has already stated that the possibility of a further cut in operating expenses is limited given the already $100 million cost cuts achieved over the last few years. Plus, capex has almost been slashed by half over the last few years and further reduction will affect its ability to aggressively compete for market share. Also, there are no non-core/underperforming assets left to divest.
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