The Deal Professor examines another deal where management and the board put their own interests above shareholders. Despite Bankrate’s hasty and flawed sales process a couple of years ago, it’s now filing for an IPO. Specfically:
The Bankrate board appeared to abdicate its responsibility to run a sale process that was open and without conflicts of interest. It contacted only one other potential buyer, which declined to make an offer. The board then also failed to form a special committee and instead proceeded to negotiate exclusively with Apax and Bankrate management.
This would have been bad enough, but Apax and the management team lowered the offer price at the last minute. The Bankrate management based the reduction on suddenly lower earnings projections for the company, projections they helped to prepare.
As the Deal Professor points out, the upside is that we can see if the “lower projections” were accurate.
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