AmericanGreetings.com to Buy Egreetings Network
According to the agreement, AmericanGreetings.com will offer 85 cents per share for all outstanding common shares of Egreetings, a leading online card and entertainment site based in San Francisco.
Stockholders owning 27 percent of the outstanding shares of common stock have agreed to the deal. This raises AmericanGreetings.com's holdings in Egreetings to 47 percent of the outstanding stock in favor of the purchase.
"There are many synergies to this combination," said Nancy Davis, director of communications at AmericanGreetings.com, Cleveland. "Our audiences are virtually unduplicated. Our content offerings are highly complementary."
Egreetings.com went public on Dec. 17, 1999.
Davis said the shared infrastructure would allow AmericanGreetings.com to offer rich media greetings content at a "much lower cost."
Plus, as the category leader and one of the top 15 sites in traffic, it offers a large online audience that can be segmented across multiple demographic, occasion and interest categories.
AmericanGreetings.com, a site under pressure to perform from parent American Greetings Corp., witnessed one of the fastest growth spurts in traffic to its site last year.
After switching to a free model in January 2000, www.americangreetings.com leapfrogged from 4 million unique visitors a month to 13 million by year's end, according to Nielsen//NetRatings' December findings.
"Acquiring Egreetings, the No. 3 site in December with 7 million visitors, will catapult us to No. 1 in the category, ahead of the current market leader, Bluemountain.com, now owned by Excite," Davis said.
Concurrent with this move, American Greetings Corp., which owns AmericanGreetings.com, said it will revise the value of its initial investment in Egreetings and absorb a non-cash charge of $33 million. The greetings cards maker became a 20 percent shareholder in Egreetings with its March 2000 acquisition of Gibson Greetings.