• by Richard Whitman , Columnist, May 10, 2021

MDC Partners said today in a regulatory filing it has scheduled a special virtual shareholders meeting for June 22 to vote on the proposed merger with Stagwell.

Mark Penn is CEO of both companies and would be CEO of the combined company if the merger is completed.

If the deal closes, the combined firm would have nine directors on its board, including Penn. The eight others are to be determined with the MDC side selecting three and the Stagwell side selecting four. MDC investor Goldman Sachs would choose one.

Both the full MDC board and the board committee that oversaw due diligence on the merger, proposed by Stagwell a year ago, recommend shareholders vote in favor of the combination. Penn did not participate in the due-diligence process given his vested interest in seeing it go through.

Two outside firms ruled the offer was “fair” from a valuation standpoint, but made no recommendations as to whether shareholders should participate or not.

In the filing, MDC reported that no alternative proposals from outside parties have been submitted to the company, although such proposals would be considered prior to the scheduled vote.

Both parties can terminate the agreement prior to the closing, although under certain conditions, if MDC decides to pull the plug it would be on the hook for a $5.8 million termination fee to Stagwell.

“We are confident that the combination with Stagwell presents a compelling opportunity for MDC and its shareholders and believe that significant value can be created for MDC’s shareholders going forward,” stated Irwin D. Simon, MDC’s lead independent director and point person on the special board committee that evaluated Stagwell’s offer.

Certain regulatory approvals are needed, including a green light from NASDAQ where shares will be traded. It also has to pass Hart-Scott-Rodino antitrust muster.

For those interested in all the wonky details (and there are lots of them), check out the filing (424B3) here.