| NEW YORK, June 6
NEW YORK, June 6 Advertising distribution
company Digital Generation Inc (DG) recently rejected a
takeover bid from rival Extreme Reach Inc of more than $20 per
share, a source familiar with the situation said on Wednesday.
The offer, backed by private equity firm Providence Equity
Partners according to the source, would have been worth more
than $550 million based on DG's outstanding shares.
Reuters first reported on March 25 that DG had hired Goldman
Sachs Group to find a buyer and has drawn interest from
several private equity firms and rival companies, citing a
separate source familiar with the matter.
Parties that have evaluated a potential purchase of DG,
formerly known as DG FastChannel, included buyout firms Hellman
& Friedman, Thoma Bravo, Extreme Reach backed by Providence
Equity Partners, and TA Associates, the source had said at that
Another private equity firm, Bain Capital, is also a suitor
for DG, a third source familiar with the situation said this
DG has rejected the offer from Extreme Reach, citing
potential antitrust concerns, and excluded the company from the
ongoing sale process, the first source said.
All these firms have declined to comment and DG did not have
Shares of DG jumped 26 percent to close at $12.13 on Nasdaq
after news of the rejected offer was first reported by
This is at least the second time in a year that the company
has sought a buyer, sources told Reuters previously.
DG's market value, which approached $900 million just a year
ago, has plunged to as low as $240 million, hit by its costly
acquisition of digital advertising company MediaMind in June and
lower ad volumes amid increased competition.
Irving, Texas-based DG helps advertisers engage with
consumers across television and online media, while delivering
The company said it helps more than 11,000 global
advertisers and agencies connect with target audiences through
TV stations and Web publishers in 75 countries.