After drawn-out negotiations, Barry Diller’s USA Networks Inc. agreed Tuesday to raise its offer for the publicly held stock in Ticketmaster Group Inc. to a price that Ticketmaster’s board accepted.
USA is now offering .563 of a share for each Ticketmaster share, compared with .506 originally, with no maximum price. USA, which now owns 50.1% of Ticketmaster and is bidding for the rest, had originally said its offer would cap out at $25.30 if USA’s stock price traded above $50, which it lately has.
The revised offer was worth $29.70 a share before trading opened Tuesday, 17% higher than USA’s original offer. But USA stock fell $1.50 to $51.25 on the news, and the value of the offer dropped as well, to $28.85, still 14% higher than the original deal.
The higher offer was negotiated by a “special committee” of Ticketmaster’s independent directors, Jonathan Dolgen and Terence Strom, advised by Salomon Bros. USA said it had reached an “agreement in principle” on the new deal with the Ticketmaster board, which now has to be put into a definitive agreement.
Ticketmaster CEO Fredric Rosen said in a statement that he was “pleased that Ticketmaster’s special committee and investment bankers were able to negotiate a price for the company that now reflects its fair value.”
Rosen hinted he would leave the company once Ticketmaster is integrated into USA, saying “I look forward to working with USA to complete the transaction in a timely manner, and I will assist them in making a smooth transition.”
Rosen’s contract expires Jan. 31 and he is expected to leave by then.