Shareholder Opposes Amazon’s Audible Bid

-- Publishers Weekly, 3/10/2008 8:11:00 AM

The Internet has been full of grumbling from small shareholders over the $11.50 per share price being paid by Amazon for Audible and last Friday Red Oak Partners, which has a 1.4% stake in Audible, released a letter it sent to both parties criticizing the price as being too low. Among the reasons Red Oak cited for believing that the bid undervalued Audible was Audible’s strong fourth quarter, which was released after the bid was announced and which Red Oak said would likely have driven up the offer. Red Oak also criticized the methodology Audible’s advisor, Allen & Co., used to value the company, and noted that it believes that as the major player in the spokenword digital download market, Audible has a bright future. In a previous report, Audible noted that Allen approached 12 strategic buyers as well as some financial buyers about acquiring the company, but none expressed interest.

Red Oak said it will not tender its shares, although with most of the larger shareholders backing the acquisition the deal is expected to be approved.