FTD, United Online amend merger agreement, up per-share cash consideration

By Lisa Kerner

Charlotte, N.C., July 17 - United Online, Inc. exercised its right to obtain additional financing under its merger agreement with FTD Group, Inc., increasing the per-share cash merger consideration paid to FTD shareholders by $2.81.

The increase is in full substitution of the $3.31 principal amount of United Online 13% senior secured notes due 2013, an FTD news release noted.

United Online received a commitment from Silicon Valley Bank to provide a $60 million senior secured term loan facility to fund a portion of the cash merger consideration.

FTD said its shareholders will now receive a total of $10.15 in cash and 0.4087 of a share of United Online common stock, for a total value of $14.38 per share of FTD common stock.

Total consideration payable to FTD stockholders and option holders would be approximately $434 million, consisting of approximately $307 million in cash and approximately 12.35 million shares of United Online stock, it was stated in the release.

The amended agreement provides that if the proceeds of the borrowings under the $60 million senior secured term loan facility are unavailable to United Online, FTD stockholders will receive the previously announced $7.34 in cash, 0.4087 of a share of United Online stock and $3.31 principal amount of notes for each share of FTD common stock in the merger.

In April, United Online agreed to acquire FTD Group in a stock and cash deal valued at approximately $800 million, or some $15.08 per share.

In June, the Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period in connection with the merger.

FTD, a worldwide provider of floral products, will operate as a wholly owned subsidiary of United Online from its existing facilities in Downers Grove, Ill., and the United Kingdom.

United Online is a Woodland Hills, Calif.-based provider of consumer internet and media services. Its services included Classmates, MyPoints, NetZero, Juno and e-mail.

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