24/7 Real Media Buyout: Is $11.75 High Enough?

Stock Tickers: TFSM, GOOG, MSFT, WPPGY, YHOO, AQNT, VCLK, TWX, IACI

24/7 Real Media Inc. (TFSM-NASDAQ) is trading up 3.5% this morning on news that it has agreed to be acquired by WPP Group for $11.75 per share.  The deal is being tallied up as a $649 million buyout net of cash received.  It says it is a 30% premium over the 60 trading average, which is irrelevant if you have been following this online advertising segment since before Google (GOOG) acquired DoubleClick.  Both boards have approved the deal but there are no go-shop or break-up fees that were made public.  The stock has recently traded as high as $13.00 because of rumors of another bidder.

We have covered this one since the stock was far lower.  On May 1, there were reports that Microsoft might pay up for it.  They were also noted in "Who’s next?" on April 13.  On May 10 we looked at what the company could fetch and came up with what would likely be an $11.81 starting price and one that could reach $15.00 or higher under the right circumstances.

The other two online ad firms are trading up this morning: ValueClick (VCLK) is trading up 2.5% at $28.00 and aQuantive (AQNT) is trading up 1.5% at $34.95.

This is one that could conceivable end up trading higher than the $11.75 price if the break-up fees or go-shop penalties aren’t insurmountable.  Microsoft (MSFT) and Yahoo! (YHOO) were supposedly in consideration here and you never know if Time Warner’s (TWX) AOL or IAC/Interactive (IACI) would consider jumping in before letting this one entirely go away.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.