Institutional Shareholder Services Backs MDC Partners-Stagwell Merger

Institutional Shareholder Services, one of the leading independent proxy advisory firms, has recommended MDC Partners shareholders vote for the proposed merger with Stagwell Media. 

A vote on the merger is scheduled for July 26. 

ISS initially did not support the merger, but reversed its recommendation after Stagwell amended its original terms to provide a greater percentage of the overall company to MDC Shareholders. 

MDC confirmed the ISS reversal. ISS itself declined to comment. 

MDC quoted the ISS report as concluding “the amended terms appear to capture a sufficient portion, if not all, of the improvement in MDC’s implied equity value, the transaction has a strong strategic rationale, and there is downside risk to rejecting the deal.” 

The ISS recommendation also stated: “The proposed combination appears to deliver an otherwise unavailable opportunity for MDC shareholders to gain exposure to faster growing, higher margin segments of the marketing and advertising industry.” 



In sum, the advisor concluded: “[MDC] shareholders will be better off as 31 percent shareholders of the combined company than they would be as 100 percent shareholders of standalone MDC.” 

MDC’s largest independent shareholder, Indaba Capital Management, has been fighting for better terms and has indicated that Stagwell’s latest amended offer remains insufficient. 

A rep for Indaba did not returned a query about the ISS decision by press time.





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