‘Not So Fast’ Says Monster’s Biggest Investor

MediaNews GroupThere’s a fly in the ointment.

You’re probably aware Randstad Holdings recently struck a deal to buy Monster Worldwide at the cost of $3.40-per-share. Some in our industry applauded the deal. But it looks like someone with skin in the game isn’t so happy.

Turns out MediaNews Group, Monster’s single largest shareholder based on publicly available information, isn’t so excited about the deal. In a recent letter to the company, MediaNews Group, or MNG, said, “It is our view that with proper focus on operational efficiency, revenue stabilization and monetization of non-core assets, Monster can achieve a stock price of $6-$8 per share over the next 18 months.”

Such a per-share price increase would represent an upside of 76 percent to 135 percent over Randstad’s price of $3.40. MNG urged shareholders not to tender their shares. They also recommended Monster explore all options, including a review of business operations, an auction, and/or a restructuring.

Some of the strategic recommendations include the following:

  • Reduce expenses by $100-$150 million through implementation of operational best practices
  • Monetize non-core/underperforming assets that are not being valued at all in current stock price
  • Reduce capital expenditures to be more in-line with competitors and other digital companies
  • Simplify the product offering and increase sales productivity
  • Focus marketing efforts on B2B customer acquisition and candidate acquisition, with a focus on ROI, and execute a re-branding campaign to attract millennials

In short, MNG paid more per share than the final sale price, and now they want to force a renegotiation if they can. Will their urging of other investors to vote against the deal snowball and actually work? Time will tell, however, the stock is up 7 percent as I’m writing this post, which could be a signal that MNG may be on to something. Stay tuned.

MNG is one of the largest newspaper companies in the country, with over $1 billion in revenue and over 240 properties in 12 states. MNG also plays in the job board space through its ownership of Jobs in the US, which operates regionally focused job boards in New England.

About the Author

joel-cheesman-headshotJoel Cheesman has over 20 years experience in the online recruitment space. He worked for both international and local job boards in the late ‘90s and early ‘00s. In 2005, Cheesman founded HRSEO, a search engine marketing company for HR, as well as launching an award-winning industry blog called Cheezhead.

He has been featured in Fast Company and US News and World Report. He sold his company in 2009 to Jobing.com. He was employed by EmployeeScreenIQ, a background check company. He is the founder of Ratedly, an iOS app that monitors anonymous employee reviews. He is the father of two children and lives in Indianapolis. Yes, he’s on Twitter and LinkedIn.

 

Joel Cheesman



Just add your e-mail!