NEW YORK Interpublic Group has sold 11 million shares in Modem Media in an underwritten public offering. The divestiture was expected [IQ Daily Briefing, Dec. 19].
The New York-based holding company, previously Modem Media's largest investor with a 42.4 percent stake, realized nearly $60 million from the sale of the common stock, which went for $5.40 per share. The sale leaves IPG, owner of R/GA and Zentropy Partners, with about 148,000 shares, or a 0.6 percent holding in the Norwalk, Conn.-based interactive shop.
The underwriters for the offering were Jefferies & Co., William Blair & Co. and Friedman, Billings, Ramsey & Co.
IPG inherited Norwalk, Conn.-based Modem Media as a part of its 2001 $1.6 billion purchase of True North Communications, which took a stake in the i-shop in October 1996. Modem Media maintains that the divestiture will not impact its business because it does not have strategic ties to IPG.
In addition to IPG, two Modem Media principals sold some of their shares in the public offering. Modem Media founder G.M. O'Connell, who owned a 9 percent stake in the company, sold 150,000 of his 2 million shares, and director Robert Allen, who held a 2.2 percent stake, offered 50,000 of his 565,000 shares. That leaves the former with an 8.4 percent interest, or 2.2 million shares, and the latter with a 2 percent investment, or 515,000 shares.