BOSTON Digitas has authorized a self-tender offer to repurchase more than 6 million shares, or roughly 10 percent of its common stock, at a price of $3.89 per share through end-of-trading on March 25.
The tender price is based on the average closing price for the past 20 trading days on the Nasdaq exchange ending Feb. 21. Digitas stock closed yesterday at $3.90. Digitas will finance the program with approximately $25 million of its own funds.
The company's largest single investor, San Francisco's Hellman & Friedman, said it intends to tender all of its shares (a procedural move, as Digitas has committed to buy only 6,426,735), as well as distribute an additional 6 million shares to its affiliates, which will then be free to sell them back to Digitas if they see fit.
Once the tender offer is complete, H&F will still own in excess of 30 million shares, or roughly 40-50 percent of the company, according to Digitas CEO David Kenny. H&F at that level will still be the largest shareholder, Kenny said.
The ultimate long-term goal, other than to reward current shareholders, is to help drive up the price of the remaining shares, making them more attractive to institutional investors, Kenny said.
Digitas in June began a separate $20 million stock repurchase program which remains ongoing. Thus far, Digitas has repurchased about $2 million of its common stock through that effort, Kenny said.
There is no plan at present to reprivatize the company or to attempt to attract a buyer, Kenny said. (About two years ago, sources said Digitas held talks with the Interpublic Group).
Digitas in January reported a fourth-quarter profit of $1.7 million, compared to the $45 million loss of a year ago. For full-year 2002, Digitas posted a net loss of $40.3 million (65 cents per share), following a $94 million loss in 2001.
The Boston-based marketing company provides a mix of relationship marketing services for clients such as AT&T, Delta Air Lines and General Motors.