Kreindler & Kreindler Announces Class Action Suit to Prevent Acquisition of Intermix Media by News Corporation
Kreindler & Kreindler Announces Class Action Suit to Prevent Acquisition of Intermix Media by News Corporation
LOS ANGELES--(BUSINESS WIRE)--Aug. 31, 2005--Kreindler & Kreindler LLP today announced that it has filed a class action lawsuit on behalf of shareholders of Intermix Media, Inc. (AMEX:MIX), which includes MySpace.com, alleging that current directors, officers and controlling shareholders of Intermix designed a sale to News Corporation (NYSE:NWS) that benefited themselves at the expense of the Company and its public shareholders. The class action lawsuit was filed in the Superior Court of the State of California for the County of Los Angeles.
The complaint alleges that in a flawed process tainted by conflicts of interest, the defendants arranged a sale of Intermix to News Corporation at a glaringly inadequate and unfair price that virtually guaranteed Intermix shareholders would receive far less than optimal value for their shares. Furthermore, defendants failed to take all necessary steps to maximize stockholder value, and did not institute a bidding mechanism to foster a fair auction of the Company to the highest bidder or explore other strategic alternatives. "It is unconscionable that the Intermix board failed to initiate a proper auction process for the Company that owns MySpace.com, one of the world's most viewed Internet sites, which continues to enjoy phenomenal growth and makes an attractive target," said Gretchen Nelson of Kreindler & Kreindler LLP's Los Angeles Office. "Indeed, our investigation has revealed that other prominent companies expressed interest in advancing more attractive acquisition proposals, only to be given the cold shoulder by the self-interested defendants." "To make matters worse, the agreement with News Corp. severely limits communications with any third party interested in submitting a competing proposal, and establishes an unreasonable $25 million termination fee if the News Corp. deal is abandoned in favor of a preferable deal with another party that actually maximizes Intermix shareholder value," said Mark Labaton, another Kreindler attorney working on the matter. The complaint alleges that instead of attempting to obtain the best terms for Intermix and its shareholders, the defendants structured the transaction to reduce their liability and maximize their gain. In doing so, the defendants breached their fiduciary duties to Intermix by: -- Failing to provide a bidding mechanism to foster a fair auction of the Company; -- Failing to solicit alternative transactions or other potential acquirers; -- Failing to take steps to maximize the value of Intermix to its public shareholders; -- Failing to value, and thereby undervaluing Intermix and its assets including its "crown jewel," a popular social networking Web site called MySpace.com, which is currently the second ranked Web domain in terms of pages viewed; -- Failing to structure the transaction so the Company's shareholders would receive a change of control premium, which is customary for a takeover of this sort; and -- Tailoring the proposed acquisition to advance their own financial, legal and other personal interests at the expense of plaintiff and Intermix's public shareholders. The lawsuit seeks preliminary and permanent injunctive relief and to recover damages. For over half a century, Kreindler & Kreindler LLP has been among the nation's most respected and successful plaintiffs' law firms. The firm specializes in complex plaintiff-side litigation and handles a wide variety of matters, including securities litigation. Kreindler & Kreindler LLP has achieved excellent results for thousands of clients. The firm has recovered a substantial number of multi-million dollar verdicts and settlements, and recently secured a $2.7 billion settlement -- one of the largest civil settlements in history. Kreindler & Kreindler LLP Office Locations: 707 Wilshire Boulevard, Suite 5070 Los Angeles, California 90017 Telephone: 213-622-6469 100 Park Avenue New York, New York 10017 Telephone: 212-687-8181 -------- END STORY BODY -------- - end main story table - -------- START CONTACT INFO -------- Contacts Kreindler & Kreindler LLP
Gretchen Nelson or Mark Labaton, 213-622-6469
LOS ANGELES--(BUSINESS WIRE)--Aug. 31, 2005--Kreindler & Kreindler LLP today announced that it has filed a class action lawsuit on behalf of shareholders of Intermix Media, Inc. (AMEX:MIX), which includes MySpace.com, alleging that current directors, officers and controlling shareholders of Intermix designed a sale to News Corporation (NYSE:NWS) that benefited themselves at the expense of the Company and its public shareholders. The class action lawsuit was filed in the Superior Court of the State of California for the County of Los Angeles.
The complaint alleges that in a flawed process tainted by conflicts of interest, the defendants arranged a sale of Intermix to News Corporation at a glaringly inadequate and unfair price that virtually guaranteed Intermix shareholders would receive far less than optimal value for their shares. Furthermore, defendants failed to take all necessary steps to maximize stockholder value, and did not institute a bidding mechanism to foster a fair auction of the Company to the highest bidder or explore other strategic alternatives. "It is unconscionable that the Intermix board failed to initiate a proper auction process for the Company that owns MySpace.com, one of the world's most viewed Internet sites, which continues to enjoy phenomenal growth and makes an attractive target," said Gretchen Nelson of Kreindler & Kreindler LLP's Los Angeles Office. "Indeed, our investigation has revealed that other prominent companies expressed interest in advancing more attractive acquisition proposals, only to be given the cold shoulder by the self-interested defendants." "To make matters worse, the agreement with News Corp. severely limits communications with any third party interested in submitting a competing proposal, and establishes an unreasonable $25 million termination fee if the News Corp. deal is abandoned in favor of a preferable deal with another party that actually maximizes Intermix shareholder value," said Mark Labaton, another Kreindler attorney working on the matter. The complaint alleges that instead of attempting to obtain the best terms for Intermix and its shareholders, the defendants structured the transaction to reduce their liability and maximize their gain. In doing so, the defendants breached their fiduciary duties to Intermix by: -- Failing to provide a bidding mechanism to foster a fair auction of the Company; -- Failing to solicit alternative transactions or other potential acquirers; -- Failing to take steps to maximize the value of Intermix to its public shareholders; -- Failing to value, and thereby undervaluing Intermix and its assets including its "crown jewel," a popular social networking Web site called MySpace.com, which is currently the second ranked Web domain in terms of pages viewed; -- Failing to structure the transaction so the Company's shareholders would receive a change of control premium, which is customary for a takeover of this sort; and -- Tailoring the proposed acquisition to advance their own financial, legal and other personal interests at the expense of plaintiff and Intermix's public shareholders. The lawsuit seeks preliminary and permanent injunctive relief and to recover damages. For over half a century, Kreindler & Kreindler LLP has been among the nation's most respected and successful plaintiffs' law firms. The firm specializes in complex plaintiff-side litigation and handles a wide variety of matters, including securities litigation. Kreindler & Kreindler LLP has achieved excellent results for thousands of clients. The firm has recovered a substantial number of multi-million dollar verdicts and settlements, and recently secured a $2.7 billion settlement -- one of the largest civil settlements in history. Kreindler & Kreindler LLP Office Locations: 707 Wilshire Boulevard, Suite 5070 Los Angeles, California 90017 Telephone: 213-622-6469 100 Park Avenue New York, New York 10017 Telephone: 212-687-8181 -------- END STORY BODY -------- - end main story table - -------- START CONTACT INFO -------- Contacts Kreindler & Kreindler LLP
Gretchen Nelson or Mark Labaton, 213-622-6469
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