Q&'A site Answers.com announced yesterday that ita4ぎa4г going to be acquired by private equity firm Summit Partners. But the decision still needs approval from the company&'s shareholders, and according to a report in Business Insider, some of those shareholders arena4ぎa4д very unhappy with the deal.
One source told BI, a4ぎAThere&'s not a shot in the world this thing is going through.a4ぎ
The publicly-traded company describes itself as the largest Q&'A site on the Web. (It launched some of its features at the DEMO conference co-produced by VentureBeat.) Answers&' board of directors approved the deal unanimously, and at $10.50 per share/$127 million total, the deal values the publicly-traded companya4ぎa4г stock at 18 percent higher than its closing price on Wednesday. (After the deal was announced, the stock price rose to $10.46 at market close on Friday.)
So whata4ぎa4г the issue Apparently BI talked to shareholders who think the price is way too low. During the first nine months of 2010, Answers reported $15 million in revenue, so Summit is paying less than 10 times the companya4ぎa4г annual revenue. Those shareholders point jealously to the 30x revenue that Demand Media earned in its initial public offering. They also say that Answers could use its $30 million in cash to improve its situation by acquiring companies or building out its sales force.
The unhappy shareholders a4ぎAclaim to control as much as 40% of Answers.com stock,a4ぎ but ita4ぎa4г not clear whether thata4ぎa4г actually true, or if their sentiments reflect a larger feeling of discontent among the companya4ぎa4г shareholders. We&'ll see what happens during the actual vote.
[image via Flickr/Mark Hillary]
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Companies: Answers.com, Summit Partners
Companies: Answers.com, Summit Partners
Anthony is a senior editor at VentureBeat, as well as its reporter on media, advertising, and social networks. Before joining the site in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. (All story pitches should also be sent to tips@venturebeat.com) You can also follow Anthony on Twitter.
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