Modem Media To Place 7.2 Million Shares on Table

Interactive-marketing firm Modem Media plans a public offering of 7.2 million shares being sold by stockholder Interpublic Group and Modem Media’s co-founders, the companies have said.

IPG, which owns 11 million shares or 43 percent of Norwalk, Conn.-based Modem Media, plans to sell 7 million shares. Company chairman Gerald O’Connell wants to sell about 150,000 shares, and Modem Media director Robert Allen intends to sell about 50,000 shares. The sale’s timing and pricing have yet to be set, pending mandatory review of the proposed offering by the Securities and Exchange Commission. Modem Media will not receive any proceeds from the sale.

IPG has granted the offering’s underwriters the right to purchase up to 1.08 million additional shares. That is viewed as a sign that IPG plans to sell more of its Modem Media shares and eventually liquidate its holding. IPG acquired its stake when it bought Modem Media parent True North Communications in 2001. Said one IPG insider: “We don’t have a strategic relationship with Modem Media, so it’s an appropriate time to divest of the asset.”

Modem Media works for Delta Air Lines, Kodak, Sprint and Kraft, among others. It also has IPG client General Motors on its roster, but Modem Media and IPG do not work together on the business.

The company also has said that O’Connell is resigning as a full-time employee. Beginning Jan. 1, he will become non-executive chairman of the board of directors and will be a part-time consultant. O’Connell, 42, has been on the board since he co-founded Modem Media in 1987 and was named chairman in 1998.