The latest appeal proved lucky for TV home shopper ValueVision Intl., which Monday said National Media Corp. accepted its $ 11.50 per share all-cash merger offer.
The news ends ValueVision’s hostile-bid strategy, begun in January and intensifying last month on the rebuff by the infomercial maker’s board of directors.
Minneapolis-based ValueVision also said it inked a management and investment deal with Buckeye Communications for the consulting services of Buckeye officers , including president Mark Hershhorn, who left Philadelphia-based National Media in April 1993 after serving as its president and chief operating officer. Hershhorn will manage National Media’s “day-to-day” operations. Buckeye will earn a yearly fixed management fee of $ 500,000, $ 750,000 and $ 1 million for the three-year contract.
“The first thing he will do is re-establish the best relationship with the industry (and) put a laser-beam focus on the international operation,” Greg Renker, president of Guthy-Renker, a leading infomercial company, said of the news. “When he was there, the stock went beyond $ 12 per share and since he left , it never went beyond it again.”
One industry observer commented that Hershhorn is the real winner in the deal , which is contingent on the successful completion of the ValueVision/National Media merger. “(National Media chairman John) Turchi kicked him out and here he comes back and in essence takes the company out from under Turchi,” he said.
Industry sources expect Turchi to leave the company despite the press release’s assurance that National Media management would remain in place.
Wall Street showed its approval, sending National Media stock 88 cents higher to close at $ 11.13 per share. ValueVision shares ended the session up $ 1.38 at $ 9.13 per, and Buckeye stock closed up $ 1 at $ 8 per share.
National Media’s board approved the more than $ 150 million bid and recommended investors tender their shares into the offer, which has been extended to April 7 from the prior deadline of midnight last night. As of last Friday, ValueVision had received about368,000 National Media shares.
ValueVision’s latest offer betters its bid made in February to acquire 50.2% of National Media’s 12 million shares outstanding at $ 10.50 cash per share, with the remainder to be exchanged for a package of securities.
At that time, the National Media board labeled the offer “financially inadequate” and “coercive,” sending ValueVision back to the drawing board to come up with more cash.
ValueVision has agreed to stop trying to elect its director nominees at the National Media annual meeting on March 21 and instead will throw the weight of its 8.6% National Media stake behind current management’s candidates.
The deal is conditional on ValueVision’s ability to elicit at least 5.825 million shares in the first part of the tender and secure financing, which it intends to do through a private placement of debt securities.
Under the terms of the contract, ValueVision also will buy 435,484 shares of Buckeye common stock for $ 7.75 per share or a total $ 3.375 million. It will also receive the same number of five-year warrants at $ 8 per share.