News Corp’s $580m bid for Intermix, the internet company which owns MySpace.com, is facing a counter offer from an investor owning around 10 per cent of Intermix.
Brad Greenspan, who founded many of the internet assets owned by Intermix but left the company in 2003 after a conflict with private equity investors who owned a large part of the group, said on Friday he had the backing of private equity investors to buy half of Intermix shares at $13.50, above the $12 offered by News Corp.
Mr Greenspan, through a newly formed investor group called FreeMySpace, wants to acquire up to half of the outstanding Intermix shares and offer investors an equity stake in the rest of the company. If successful, he said he would centre the entire company around MySpace.com, the rapidly growing community website which is Intermix’s prize asset, and sell the group’s other assets.
Mr Greenspan said in a telephone interview that he had secured funding from private equity investors, who he declined to identify, for up to $370m. He said Intermix’s assets other than MySpace.com could fetch about $200m if sold.
“We went after this structure due to a desire to keep and be part of a public company that owns MySpace,” Mr Greenspan said. “A unique visitor to a site is not as valuable as how much time is spent on that site. MySpace has the secret sauce - their visitors spend a lot of time there.”
Intermix said in an e-mailed statement it had not received a proposal from FreeMySpace and was unaware of any such offer. “If and when any such proposal is forthcoming, the company’s Board will give it due consideration,” the statement said. News Corp declined to comment.
Mr Greenspan, who plans to file a proxy statement with the Securities and Exchange Commission, said he had already spoken to Intermix shareholders and that his plan had “generated a lot of excitement”. None of the shareholders have publicly commented on his plan.
The move could put pressure on News Corp to raise its offer. Already, Mr Murdoch, chairman and chief executive of the media group, and other senior executives have talked about the benefits of marketing via MySpace.com to their current film, sport, entertainment and news businesses.
The acquisition of Intermix is a key part of Mr Murdoch’s strategy to develop a strong internet presence. As well as this acquisition, News Corp has bought Scout Media, a sports internet site, and paid $650m for IGN Entertainment, which focuses particularly on video games. All these sites are especially popular with young men, a group which analysts said are hard to reach with traditional media.