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Agency.com Slashes 200 Jobs

By Published on .

NEW YORK (AdAge.com) -- Organic, the San Francisco-based i-shop, said late Tuesday that it had received an offer to be acquired by Seneca Investments LLC, the e-services holding company established by Pegasus Partners and Omnicom Group earlier this year.

The proposal calls for Seneca, which currently owns 22.2% of Organic, to acquire the remaining shares it does not already own, or is not under contract to purchase, for 33 cents per share. Organic also said Tuesday that Seneca and the majority stockholder, Organic Holdings, had entered into agreement for Seneca to buy Organic Holdings' 58.7% stake in the company.

Organic Holdings would receive $5.9 million from Seneca for its stake at closing and an additional payment of $10 million if certain conditions are met.

The acquisition of the remaining shares is subject to a number of conditions, including participation in the transaction of at least half of the shares in Organic that Seneca is not already in the process of buying, changes to the company's San Francisco office lease, which was negotiated to house a staff hundreds of people larger than what the company currently employs, and other conditions.

Earlier this year, Seneca made a bid for Agency.com, in which Omnicom also had a minority stake. That deal is also pending and is expected to close in October.

Agency.com this morning announced a further restructuring of the company, including the layoff of 200 people, or 19% of its staff. The cuts include the closing of the Portland, Ore., office.

Agency.com CEO Chan Suh said no New York employees were laid off.

The i-shop has had to move its headquarters, at least temporarily, because its offices at 20 Exchange Place were located near the World Trade Center.

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