Robbins Arroyo LLP: Acquisition of Rentrak Corporation (RENT) by comScore, Inc. (SCOR) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Rentrak Corporation (NASDAQ: RENT) by comScore, Inc. (NASDAQ: SCOR). On September 29, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which comScore will acquire Rentrak. Under the terms of the agreement, Rentrak shareholders will receive 1.15 shares of comScore for each share of Rentrak they own, the value of which is equivalent to $49.62 per share of Rentrak.
Is the Proposed Acquisition Best for Rentrak and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Rentrak is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $49.62 merger consideration represents a premium of only 7.5% based on Rentrak’s average one-month closing price. This premium is significantly below the average one-month premium of nearly 17.9% for comparable transactions within the past five years. Further, the $49.62 merger consideration is significantly below the target prices of six analysts, ranging from $85.00 set by an analyst at Needham & Co. on October 10, 2014, to $62.00 set by an analyst at Piper Jaffray on August 11, 2015. In the last three years, Rentrak traded as high as $87.40 on November 28, 2014, and most recently traded above the merger consideration – at $49.68 – on September 21, 2015.
On August 10, 2015, Rentrak reported strong earnings results for its first quarter 2016. Total revenue for the quarter was $27.5 million, an increase of 23% from the same period last year. Net income for the quarter was $1.6 million, an increase of 265% compared to the same period last year. Additionally, Rentrak has beat consensus analyst estimates for adjusted net income in three out of its past four quarters. In commenting on these results, Rentrak Vice Chairman and Chief Executive Officer Bill Livek remarked, “We are very pleased with our progress this quarter, and continue to believe that we are firmly on target to achieve our full year guidance given the health of our business in the media ecosystem. Our partnership with Oracle Data Cloud will expand our Advanced Demographics offering to help advertisers and networks better understand how to reach their customers and viewers. We are also making great headway with Rubik, where we increased our client base from 10 to 14 in a short period of time. Our political vertical will benefit from almost $4.5 billion in expenditures related to the 2016 elections, and our Sports business addresses a very large market. We are excited about these and many other opportunities and our ongoing ability to monetize them.”
In light of these facts, Robbins Arroyo LLP is examining Rentrak’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Rentrak shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Rentrak shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.