TMP Worldwide (Nasdaq: TMPW), parent of online jobs company Monster.com, said Thursday that it will not raise its offer to buy rival job site HotJobs (Nasdaq: HOTJ), clearing the way for a US$436 million takeover by Yahoo.
TMP said that it “has already offered HotJobs full and fair value for the company, and that it would not be in the best interests of TMP shareholders to adjust its current offer.”
The advertising holding company also repeated its view that its offer “provides the best long-term value for HotJobs shareholders.”
The news comes one day after HotJobs said it was inclined to accept the Yahoo! offer and gave TMP until Thursday morning to come up with a better one.
“While a combination with HotJobs is attractive to us, we do not see a financial or strategic rationale for modifying our bid for the company,” said chairman and CEO Andrew McKelvey in the Thursday statement, adding that the company “look[s] forward to competing with HotJobs in this dynamic and growing marketplace.”
Analysts say that job search companies could do brisk business in an economic downturn. Monster was a strong performer during the third quarter, enabling TMP to post a 20 percent profit improvement over a year earlier. HotJobs, meanwhile, had revenue of $27.5 million for the quarter ended September 30th.
The deal brings Yahoo! into a potentially lucrative new market even as its online shopping business grows. On Wednesday, Yahoo! said its holiday sales volume soared 86 percent higher than last years level. The company has been moving into new areas to reduce its reliance on online advertising revenue.
Yahoo! has had two rounds of layoffs this year. Last month, the company said it would cut 400 jobs, on top of another 420 laid off last April. In October, the company posted a $24 million net loss, saying the weak economy was hurting its business.
TMP agreed to buy HotJobs last June with a cash-and-stock bid worth $460 million at the time. Stock prices have dropped significantly since then, however, leaving the offer worth about $350 million today.
On December 13th, Yahoo! made its bid of $10.50 per share for HotJobs, saying the offer was not only superior in price but posed fewer potential complications. U.S. government regulators were looking askance at the proposed TMP-HotJobs combination because of potential anticompetitive issues.
Yahoo! now must pay $15 million to TMP to terminate its agreement with HotJobs. The company must also come up with fees of as much as $2 million to cover legal and consulting costs.