(NASDAQ:MDCA) – MDC Partners Inc. (“MDC” or the “Company”) announced today that it has received a revised offer from Stagwell Media LP (“Stagwell”) for the business combination transaction between the Company and Stagwell (the “Transaction”). The MDC Special Committee is evaluating the revised Stagwell proposal which included a decrease in the share consideration that Stagwell would receive in the Transaction to 185 million common shares, a reduction of approximately 31 million common shares from the 216.25 million common shares agreed to in the transaction agreement entered into on December 21, 2020 (the “Transaction Agreement”).
The result of this proposed change in share consideration is that, on a pro forma basis, the existing MDC common shareholders (including Stagwell) would own approximately 30% of the common equity of the combined company.
With regard to the revised offer, the MDC Special Committee provided the following comment:
“We continue to support the combination of MDC and Stagwell, which offers MDC the chance to partner with a leading digital and technology-focused marketing business to create profitable growth opportunities and a better company. The Special Committee is encouraged by Stagwell’s attention to the views shared by certain MDC shareholders and welcomes Stagwell’s willingness to address that feedback in a meaningful way. The Special Committee and its advisors will move quickly to review and evaluate Stagwell’s proposal in order to make a recommendation to MDC shareholders as soon as practicable with respect to the revised offer.”
The revised Stagwell proposal also included that each of Stagwell and Goldman Sachs & Co. LLC (together with its affiliates) would forego accretion under the terms of their respective preferred shares in the combined company for a period of one year following the closing of the Transaction, and the Stagwell Net Debt Cap (as defined in the Transaction Agreement) would be increased by $25 million, from $260 million to $285 million. There can be no assurance that the revised Stagwell proposal will result in further amendments to the Transaction Agreement or that the Transaction will be consummated on the terms set forth in the revised Stagwell proposal.
