The Phoenix Business Journal is reporting that on Friday, private equity company Tuition Build Inc. submitted a $645M bid to acquire CDN provider Limelight Networks in an effort to take the company private. With Limelight’s stock closing at $2.83 a share on Friday, Tuition Build’s offer values each share of Limelight at just over $6.50, which is a nice premium considering that Limelight has yet to turn a profit over the past thirteen years.
With Goldman Sachs still holding about 30M shares the last time I checked, they have a lot of veto power in accepting or rejecting such an offer and historically, have rejected many acquisition offers by other CDNs. Over the years Limelight had more than half a dozen legitimate offers to sell the company, including two offers from Level 3, at least two from Akamai and one from AT&T, for more than $12 a share, that I am aware of. Hopefully Goldman doesn’t make the same mistake this time around and gets a deal done so Limelight can get help in growing their business and making it profitable.
Updated June 16th: Limelight has issued a press release saying that their management,”has concluded that Tuition Build does not have the experience, credentials, financial resources, or capability to complete the proposed transaction, and that Tuition Build’s stated interest in acquiring Limelight Networks is not an actionable proposal. Accordingly, management believes current and prospective investors in Limelight Networks should disregard Tuition Build’s proposal.”
Disclaimer: I have never bought, sold or traded a single share of stock in any public company ever.