Shareholders Approve Digitas' $160M Modem Media Buy

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Shareholders of both companies have approved direct and interactive marketing agency Digitas Inc.'s acquisition of rival Modem Media Inc., according to an announcement yesterday.


The transaction is expected to close today since all third-party and regulatory approvals have been obtained.


Modem Media shareholders will receive a 0.7 share of Digitas common stock for each share of its own prior to the transaction. Based on the Oct. 13 closing price, Digitas common stock worth nearly $160 million will be issued to Modem Media shareholders.


Modem Media becomes a wholly owned subsidiary of Digitas.


The purchase yields Modem Media clients like America Online, Allianz, Heineken USA, The Home Depot Inc., Philips Electronics, PricewaterhouseCoopers, General Motors Corp., IBM Corp., Kraft Foods, Hewlett-Packard Co., Sprint Corp. and Delta Air Lines. Both agencies already share many of these clients.


Opened in 1987, Modem Media has 270 employees in London, San Francisco and its Norwalk, CT, headquarters. The agency will keep its name and the respective office chiefs will keep their jobs.


Digitas, Boston, has offices in London, Chicago, New York and San Francisco. The agency's client roster includes American Express, Delta Air Lines, General Motors, AT&T and America Online.


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