HotJobs Gives TMP 72 Hours to Raise Offer
Online help-wanted site HotJobs.com Ltd. Monday gave Monster.com’s owner 72 hours to top a $436-million takeover bid from Yahoo Inc., setting the stage for a bidding war between rival suitors that run two of the Web’s most popular destinations.
New York-based HotJobs told Monster.com’s parent, TMP Worldwide Inc., that it will call off their 6-month-old merger agreement unless TMP can beat an unsolicited $10.50-per-share bid made by Sunnyvale, Calif.-based Yahoo less than two weeks ago.
HotJobs set a 9 a.m. EST Thursday deadline for TMP to improve its all-stock offer, which was valued at $9.11 per share based on TMP’s closing price Monday on the Nasdaq Stock Market.
If TMP doesn’t sweeten the pot, HotJobs said it will enter formal negotiations with Yahoo. Jilting TMP would cost HotJobs $17 million to cover a merger termination fee and other expenses during the six-month courtship.
TMP will respond to HotJobs’ ultimatum “at an appropriate time,” spokesman David Rosa said.
Industry analysts have anticipated a bidding war for HotJobs since Yahoo unexpectedly entered the fray with its Dec. 12 bid.
Investors are betting that HotJobs will be sold for more than Yahoo’s stock-and-cash offer of $10.50 per share. HotJobs shares gained 26 cents to close at $10.73 Monday on Nasdaq. TMP climbed 40 cents to close at $41.50 and Yahoo fell 25 cents to close at $16.67, also on Nasdaq.
Yahoo’s pursuit of HotJobs caught some analysts off guard because the site ranks a distant second to Monster.com in the online recruitment market. HotJobs has a database of about 5 million resumes. Monster.com has 14 million resumes.
The HotJobs bid is part of Yahoo’s effort to rebound from a yearlong financial slump through the addition of revenue-generating features at its popular Web portal.
HotJobs charges employers and recruiters to list job openings and collects fees for access to its resume database.
Like many other dot-coms, HotJobs remains unprofitable. Through the first nine months of the year, HotJobs lost $21.2 million on revenue of $92.6 million.
Though not as well-known as Yahoo, TMP Worldwide is the larger company, with $1.1 billion in revenue through the first nine months of the year. Yahoo generated $528.5 million in revenue during the same period.
As of Sept. 30, Yahoo had $346.1million in cash versus TMP’s $317.6million.
