• by Richard Whitman , Columnist, July 12, 2021

Last Friday, MDC Partners and Stagwell, both led by Mark Penn, amended the deal terms of the companies’ proposed merger in an SEC filing. 

But big MDC independent shareholder Indaba Capital Management said Monday the “barely revised terms” are still unacceptable. The investor suggested other independent shareholders it “aligned” with during the merger process also remain unsatisfied with the newly adjusted terms. 

Indaba said it would support a fair deal and noted it was willing to accept a deal that includes total consideration equal to 35% of the newly combined entity’s shares for independent shareholders, down from the 37.5% to 40% proposed earlier. But it is still well above the 31.2% Stagwell is offering — its third increase since the initial proposal was made last year. 

“MDC and the advertising industry have recovered markedly since this transaction was initiated, meaning the improvement in the transaction’s terms should also be significant,” Indaba stated. 

“Rather than reward Mr. Penn’s attempt to capitalize on the pandemic-ravaged environment and accept his third “best and final” offer, we will oppose this deal until its terms reflect today’s market realities and the healthy state of the advertising industry.”