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Indaba Capital Management L.P. (together with its affiliates, “Indaba” or “we”), which is the largest independent shareholder of MDC Partners Inc. (NASDAQ:MDCA) (“MDC” or the “Company”), today issued a new presentation detailing its opposition to the barely revised terms of the Company’s prospective merger with Stagwell Media LP (“Stagwell”). The revised terms were released by MDC and Stagwell on Friday, July 9th.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210712005400/en/
Derek Schrier, Managing Partner of Indaba, commented:
“Due to Mark Penn’s unwillingness to compromise and propose revised transaction terms that reflect current equity market valuations and the present health of the advertising industry, we continue to oppose the prospective combination with Stagwell. We are not going to acquiesce to Mr. Penn’s desire to ram through self-serving deal terms that undervalue MDC’s public company structure, lack an appropriate control premium and rely on completely outdated pandemic economics. We made Mr. Penn aware of these lingering concerns earlier in the month, when we also told him Indaba is aligned with certain fellow shareholders who have indicated a willingness to support a deal that includes total consideration equal to 35% of the newly combined entity’s shares (a level far below Indaba’s previously stated range of 37.5%-40%). Unfortunately, we find that the revised terms released on Friday ignore this feedback and continue to perpetuate the deal’s many issues:
We hope that Mr. Penn, who seems to have mistaken this process for a game of political poker, comes to understand that he cannot rely on bombastic negotiating threats and non-negotiated, immaterial bumps that lack shareholder support to get this deal done. Shareholders are not oblivious to his immense economic incentives and the fact that he stands to receive 75% of Stagwell’s profits. In light of the extraordinary conflicts hanging over this transaction, we contend that it is long past time for MDC’s shareholders to receive a credible proposal that takes into account their feedback and sound financial analysis.”
Posted In: MDCA