Indeed, Millennial has been the subject of acquisition rumors before, with some of those reports singling out AOL as a potential suitor.
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TechCrunch, which is owned by AOL, reported the story, citing a source which claimed that it would be weeks before a deal was announced, should it occur at all. The rumored buyout price is in the range of $300 million to $350 million, a significant premium over Millennial Media’s $200 million market capitalization at Wednesday’s close.
Verizon and Millenial Media have yet to respond to the rumours. Last week, Millennial put out this statement about equity grants to six unnamed employees as part of retention packages, “being made as a material inducement to employees entering into employment with Millennial Media in connection with the acquisition transaction”.
AOL purportedly began looking into a deal with Millennial prior to being acquired by Verizon.
If AOL buys Millennial Media, that could give Verizon even more advertising reach.
Millennial Media was one of the many mobile ad startups to emerge out of that larger trend. That company’s market cap sits at about $257 million. The company has about $37 million in cash on its balance sheet. The company blamed the decline on “decreases in revenue from several large app download advertising clients in 2015 versus 2014”.
That increased activity could also be one reason why AOL would want to ramp up its business with Millennial Media’s ad network.
“Millennial has a bunch of good assets and some legacy bad assets”, one observer told TechCrunch.
Millennial Media went public at 13 in 2012, but its stock has sagged amid stiff competition with Google and Facebook (NASDAQ:FB) in mobile advertising.
Further, as TechCrunch noted, AOL may be interested in bulking up its mobile ad position following its announcement last month that it would take over Microsoft’s display, video and mobile advertising operations in the United States and a handful of other countries. More than 60 percent of digital media consumption in the US happens on mobile devices, as said by ComScore’s 2014 survey.
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Millennial gained 29 percent to $1.87 at 10:34 a.m.in New York and rose as much as 42 percent to $2.06 earlier, the most since March 2012.
