NetRatings and Jupiter Media Metrix Terminate Acquisition Agreement
The companies' actions come after extensive discussions with the staff of the Federal Trade Commission (FTC). The FTC staff has indicated that it would strongly recommend that the FTC challenge the loan and security agreement that the companies entered into in conjunction with the acquisition agreement.
The FTC staff also rejected alternative loan structures proposed by the companies. Additionally, the FTC staff has indicated that it would recommend that the FTC challenge the acquisition and seek a preliminary injunction enjoining consummation of the acquisition.
Both David Toth, CEO of NetRatings, and Robert Becker, CEO of Jupiter Media Metrix, reportedly disagree with the FTC staff's conclusions regarding the loan and security agreement as well as the competitive impact of the acquisition, but Becker said that without the benefit of the loan agreement, Jupiter Media Metrix was not in a position to contest the FTC in a lengthy court challenge.
The decision to mutually terminate the acquisition agreement does not require either company to pay a breakup fee, and each company will bear its own acquisition-related expenses.
In connection with the announcement of its proposed acquisition of Jupiter Media Metrix, NetRatings also announced that it had agreed to purchase the interests of ACNielsen eRatings.com that it does not currently own. The eRatings transaction is subject to customary closing conditions as well as completion of the Jupiter Media Metrix acquisition.
At this time, the parties to the eRatings transaction have not determined whether that transaction will proceed and, if it does, whether or not it will be consummated without modification in its terms.
NetRatings also announced today that it will discontinue two products and reduce staff.
"We have sharpened our focus on our core audience measurement and analytical research services, with an array of exciting new features planned for the coming months," said Bill Pulver, president and COO of NetRatings. "By re-allocating our resources toward these principal products, we maximize the value delivered to our clients and our shareholders."
The streamlining initiative will eliminate 20 positions, or about 15% of the company's employee base. Two products, AdSpectrum and eCommercePulse, will be discontinued. The company anticipates annualized cost-savings of between $6 million and $8 million as a result of these changes.