News Corp. is rushing to wrap up the auction for Myspace before its fiscal year ends on June 30.
Final round bids were actually due in late April, but in order to become comfortable with Myspace’s lofty $100 million asking price, several bidders have requested more in-depth financial information on the company, sources familiar with the situation told Adweek.
News Corp. coughed up details on Myspace’s tricky contract liabilities and historical revenues, asking bidders to submit revised offers which were due yesterday, according to AllThingsD.
News Corp.’s initial pitch books on Myspace contained only optimistic, best-case-scenario projected revenue figures, and even those were described as “bleak.” The social network plans to post a $165 million loss for fiscal 2011, with revenues that will shrink by 23 percent.
Armed with more detailed financials, bidders are now in discussions with News Corp. to help the company “better understand” the structures of existing bids, one buy-side source familiar with the situation told Adweek. Several of the bids utilized creative deal structures that involve a blend of debt and equity. Meanwhile, News Corp. has sweetened the pot by offering to maintain a minority stake in Myspace rather than divest it outright. Further, several of the bidding parties have met about joining forces to do the deal.
At least one of the auction’s final round bids came in “well below” News Corp.’s $100 million asking price, and at least one approached it, two buy-side sources said.
At last count, the bidding pool for Myspace, narrowed from between 20 and 30 parties, included an unusual mix of buyout firms, strategic bidders, the venture capital arm of a brand strategy house, and a hedge fund.
That includes Providence Equity, a media-focused buyout shop, and Criterion Capital, a Los Angeles-based hedge fund which last year acquired Bebo, the teen-focused social network which wilted under AOL’s ownership. Redscout Ventures, the venture capital arm of branding company Redscout, has teamed up with private equity firm THL Partners. Reports have named Myspace CEO Michael Jones, China gaming company Tencent Holdings and Gores Group as bidders.