E-commerce specialist Digital
River said Thursday it
has agreed
to be acquired by an
investor group led by Siris
Capital Group in a
transaction valued at about $840 million.
In this deal to take Digital
River private, Siris would acquire all of the company’s outstanding
shares for $26 per share in cash. Digital River’s board of directors
has approved the deal.
Wall Street on Friday bid up the
share price to match the deal’s premium, with shares rising 47.6
percent to $25.65. Prior, the stock trading in a range between $14 and
$19 over the past 52 weeks.
The timing of the deal has
raised a few eyebrows, according to
Reuters, which noted Friday that well-timed bullish options bets on
Digital River were placed about two weeks ago.
This spike in activity involved
nearly 28,000 calls traded between Oct. 6 and Oct. 13, according to
options analytics firm Trade Alert. Average daily volume on Digital
River from the beginning of the year through Oct. 6 was 36 calls,
Reuters quotes Trade Alert as saying.
Minnetonka-based Digital River
is the behind-the-scenes operator for the online stores of thousands of
software, gaming and consumer-electronics and companies. Its clients
have included giants like Microsoft and Electronic Arts.
But Digital River has faced
financial woes in recent years.
After a rough 2012, with a $200
million loss in the fourth quarter, it appointed former
Corel Corp. head David C. Dobson as its new CEO in what was then
described as a turnaround effort.
“We are pleased to have reached
this agreement with Siris, which provides significant value to our
shareholders,” Dobson
said in a statement. “We believe
that this transaction will provide Digital River with the flexibility
to innovate and execute our vision of setting the standard for global
e-commerce technology and services.”
Under the terms of the
agreement, Digital River is able to solicit alternative acquisition
proposals from third parties during a 45-day “go-shop” period,
following the date of execution of the merger agreement.
