Swedish online marketing group, TradeDoubler, have been subject to a $900m cash offer by internet content provider AOL, a wholly owned subsidiary of US media giant, Time Warner Inc. AOL has recently been restructuring most of its markets in order to become a more advertising-led business, competing with the likes of Yahoo! and Google within the ever-growing web marketing sphere. The acquisition of TradeDoubler would allow AOL to sell more advertising online via its European sites; moreover, parent company Time Warner believes the addition would complement their own AOL-owned company, Advertising.com - an online advertising network for publishers and advertisers.
Jeff Bewkes, President of Time Warner Inc. said of the offer:
"With AOL and Advertising.com, we have built a robust online advertising business in Europe, and TradeDoubler will help us accelerate the growth of this business."
The offer of 215 kronor per share represents a 20 per cent increase over the average TradeDoubler share price across the preceding three months, as well as reflecting AOL's determination to reinforce its European advertising business following the sale of its internet service operations across the UK and Europe. While the offer is still subject to shareholder approval, the board of directors at TradeDoubler has recommended that AOL's offer be accepted. The acceptance period for the offer is expected to run from January 22nd to February 19th, with around 20 per cent of TradeDoubler's shareholders having already accepted the bid.
Randy Falco, Chairman and CEO of AOL, said:
"This investment provides a unique opportunity for both TradeDoubler and [AOL] to capitalize on the continued rapid growth in online advertising and e-commerce in Europe. We believe that TradeDoubler will be complementary with our other businesses, especially with our third-party advertising network - Advertising.com. We look forward to working with the great people at TradeDoubler to offer European online marketers the broadest range of advertising solutions and websites the most comprehensive set of monetization opportunities."
TradeDoubler was founded in 1999 and went public in 2005, following the completion of its IPO. The company provides online marketing and sales solutions and manages many performance-based marketing programmes for a list of high-profile clients. Although headquartered in Stockholm, Sweden, the company's biggest market is the UK, where it has benefited from rapid adoption of online advertising by marketers. TradeDoubler has 334 workers with operations in 18 countries, including France and Germany, as well as Scandinavia and other parts of Europe.
The company, whose clients include Dell, British Telecom and ASDA among others, is best known for their pioneering affiliate marketing programmes, in which website owners receive payment for passing traffic onto affiliated sites, recording sales of $151 million in 2005.
TradeDoubler had been the subject of much takeover speculation during 2006, but said in mid-December that takeover talks had ended. However, many analysts expect that the company may yet receive a higher bid. Opening stock trading in Stockholm saw TradeDoubler's price per share rise to 220 kronor, an increase of 5 kronor over the price offered by AOL.
