Some disgruntled shareholders would be happy with a buyout offer that provides them a $5 million windfall over the market price.
Don’t count Brad Greenspan in that category.
The former chief executive of Intermix Media Inc. has yet to drop a lawsuit he filed against the company in February despite News Corp.’s July 18 announcement that it would purchase the social networking Web site for $580 million. That would value Greenspan’s 3.9 million shares at nearly $48 million, 12 percent more than they were worth before.
Greenspan, who holds the largest stake in Intermix, was ousted as chief executive in 2003 following a bitter proxy battle as the company underwent restructuring and courted venture capital investment. He’s been a thorn in the company’s side ever since, alternately claiming the role of shareholder advocate and wronged former executive.
Greenspan filed suit in February in L.A. Superior Court against Intermix, current and former directors and officers, and VantagePoint Venture Partners, a large investor. Charges range from fraud to libel, interference with contract, false and misleading statements and breaches of fiduciary duty.
He also stated publicly that he does not approve of the terms of the News Corp. acquisition and advised shareholders to vote against it, complaining that the acquisition price was too low. While it’s not clear whether the lawsuit can hold up the acquisition, some think its time for him to drop it especially given that the buyer is News Corp., led by Rupert Murdoch.
“Mr. Murdoch has a certain amount of clout, and he’s not afraid to use it,” said John Tinker, Internet analyst at ThinkEquity Partners LLC. “I think anyone dealing with him would be advised to move very cautiously.”
In its June annual report, Intermix stated it would fight the lawsuit, while News Corp. in a merger-related filing with the Securities and Exchange Commission went so far as to declare it would not pay any money to settle it.
Intermix was rescued by venture capital funding in 2003 amid accounting problems under Greenspan. A part of the deal involved Greenspan leaving the company. Tinker said it’s long past time for Greenspan to fulfill that promise.
“The company had a lot of problems,” Tinker said, adding that “part of the price was that Brad had to move on but he obviously hasn’t.”
“Brad got extremely lucky. I don’t think anybody thought the company would be hitting $12 per share. It would be best if everybody just sort of moved on here.”
Greenspan could not be reached for comment. News Corp. and Intermix declined comment.
