MAIN NEWS HEADLINES
March 14 – March 20, 2008 Edition
Okay Sale to Amazon
Despite Red Oak Protest
NEW YORK, NY/3/11/08–Stockholders of Audible.com approved Amazon.com‘s offer to acquire the company at $11.50 per share, despite a protest by Red Oak Partners, LLC the previous week. The tender was approved by 87% of Audible’s stockholders. Other share holders have until March 14 to tender their shares.
Amazon plans to complete the acquisition right away, despite a protest by Red Oak Partners, LLC, which owns 1.4% of Audible’s stock. David Sandberg, the portfolio manager of the Red Oak Fund, LP, sent a letter last week to Audible chairman Donald Katz criticizing the offer as being too low.
We analyzed this offer in great detail and believe the board ignored important factors in recommending the deal, Sandberg said.
In the letter to Audible, Inc. executive Donald Katz, Sandberg said Red Oak believes the offer "to be inadequate and below fair value." Red Oak owns 364,400 shares (about 1.4%) of Audible. Sandberg said the group would not accept the offer.
Red Oak criticized Audible for releasing its earnings just one week before the expiration of the Amazon tender offer, leaving shareholders little time to consider the earnings or evaluate the offer.
The Red Oak Partners say Audible’s stock price was pushed down by more than 20% over a two-week period prior to the offer, but Audible’s positive earnings report, which showed a 34% growth in revenues for the year–was not released until the day before Amazon’s offer was announced.
"In what is becoming a war over end consumers, we believe that Audible is a small yet important piece in a comprehensive consumer product offering, and therefore strategic value should be priced into any acquisition. We do not believe any such value was priced into this deal," the letter said.
"We oppose this offer and do not intend to tender," the letter said. "Further, we would consider exercising our right to dissent from the merger should the offer go forward and would consider participating in the stockholder litigation which has been filed including asking the judge to have the plaintiffs justify the price of the currently proposed settlement."
However, the sale was overwhelmingly approved by shareholders on Monday, March 10.