IAC/InterActiveCorp has put forth a proposal to acquire Angie's List for $8.75 per share in an all-cash deal. The move would have combined Angie's List's crowd-sourced reviews service with IAC's HomeAdvisor business. It's said, however, that the board of directors at Angie's List initially opted not to have any part in this discussion.
The amount being offered was a "compelling premium of 50 percent over the Angie's List unaffected share price, as well as the trailing 90-day average trading price for the stock," according to IAC.
Update: In a press release issued later in the day, Angie's List said that its board and management team "are committed to acting in the best interests of all Angie's List shareholders" and will "carefully review and evaluate IAC's proposal to determine the course of action that the Board believes is in the best interest of the Company and all of Angie's List shareholders."
Angie's List has secured Bank of America Merrill Lynch as its financial advisor and Sidley Austin LLP as its legal advisor. So while it was thought that the company wouldn't even give IAC the time of day, it looks like there's a possibility that the board will actually entertain it and move forward on a deal.
Based on the number of outstanding shares that Angie's List has (58.52 million), at $8.75 a share, IAC would be paying more than $500 million for the reviews service. IAC says that the deal would combine a highly trafficked site and fee-paying service professionals with its home services platform. "We are fully committed to this transaction and are confident that both Angie's List stockholders and our stockholders will recognize the value of our proposal," wrote IAC chief executive Joey Levin.
According to Levin's letter to Angie's List's board, the acquisition process started at the beginning of October, and a formal meeting apparently took place on October 12. But after seeing Angie's List's stock price increase, IAC has opted to publicize its letter for all stockholders to see in order to press its case for the combination of the two companies.
"Our strong preference would have been to work with you on a confidential and cooperative basis. However, we have been unable to develop any meaningful dialogue with you for many months now and were disappointed by your unwillingness to continue discussions with us following our meeting," Levin wrote.
Shares in Angie's List shot up more than 11 percent in after-hours trading following the news release by IAC and is now trading at $8.80 a share. On the flip side, IAC's stock is up 0.09 percent at $65.37 after being down 1.06 percent for the day.