CMGI-Engage marriage annulled
CMGI Inc has pulled out of its bid to take full control of Engage Inc, its majority-owned online advertising subsidiary, after disagreements about which direction to take the firm. As a result, CMGI's chairman and CEO have both resigned from Engage's board.
May 21, CMGI announced its intention to acquire the 24.5% of Engage it does not already own, via an offer of 0.2286 CMGI shares for every outstanding Engage share, representing a premium of about 20% on the previous day's closing price.
"During the last month since we made the proposal, senior management of Engage and CMGI could not reach consensus as to the execution of the business strategy for Engage," said CMGI CFO Thomas Oberdorf. "As a result, CMGI has decided to withdraw its proposal."
George McMillan, CMGI's CEO, and David Wetherell, CMGI's chairman and former CEO, have both resigned from Engage's board of directors as a result of the falling out. Both companies recently reported disappointing third fiscal quarter numbers, posting big net losses on sales that continue to slide.