Metromail Stock Soars on Takeover Rumor

Share this article:
Looking for a way to boost its disappointing stock price, Metromail got it Feb. 11 as its stock soared $8 7/16 to a 52-week high of $26 3/16 after an announcement that the company was the target of takeover interest.


Metromail (NYSE: ML) was the second biggest percentage gainer of the day with a share increase of 47 percent. Barton Faber, chairman, CEO and president, said Feb. 10 that Lehman Brothers had been retained to manage and formalize "unsolicited indications of interest to acquire or merge'' with the company.


Sources at Metromail, Lombard, IL, expect to compile a short list of buyers by March and have a tender offer by April. The database and direct marketing giant suffered an earnings loss of 24 cents per share in the fourth quarter, far below the 50 cents per share in net income analysts were expecting, according to Chicago-based Zacks Investment Research.


While the company is doing better than the numbers suggest, as evidenced by revenue and cash flow growth, Faber acknowledged that its stock has been lagging. Wall Street sources estimate Metromail should be trading in the $30 to $40 range. Metromail executives seem convinced that a merger or acquisition is the best way to boost share price.


Faber said that such offers had come "at substantial premiums to the current market price'' and that any action would be motivated "to maximize shareholder value.''
Share this article:
close

Next Article in Agency

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Agency

Russ Klein Tapped to Head American Marketing Association

Russ Klein Tapped to Head American Marketing Association

The former Burger King and 7-Eleven CMO takes over as the organization looks to expand globally.

Publicis Launches New Digital Agency

Publicis Launches New Digital Agency

Roar, an amalgam of top digital talent from across Publicis Groupe, will be led by Zenith OptiMedia veteran Sean Reardon.

RAPP Names Orlov CEO

RAPP Names Orlov CEO

The Volkswagen marketing executive is a veteran of Wunderman and WPP.