The long-awaited merger between MDC Partners and Stagwell has finally been approved following a special shareholders meeting held today. The combined company will be renamed Stagwell and will be traded on the NASDAQ stock exchange.
According to the Ad Age Datacenter's Agency Report 2021, MDC Partners had 2020 worldwide revenue of $1.2 billion; The Stagwell Group had worldwide revenue of $888 million. The combined company would have notched 2020 worldwide revenue of $2.1 billion, which means that even combined with Stagwell, MDC maintains its 14th place ranking, just behind Cheil. The company currently anticipates that the transaction will be completed on or around August 2 this year.
Stagwell and MDC first announced the merger last December in a deal negotiated with the MDC board’s special committee. However, the meeting, which was initially scheduled for July 22, was changed after the holding companies restructured the terms of the deal following hesitance from some shareholders. The most boisterous opposition came in June from one of MDC’s largest shareholders, Indaba Capital Management.
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“We are not able to sit by as Stagwell tries to secure what we view as a sweetheart transaction that deprives us and other MDC shareholders of significant value,” Derek Schrier, Indaba’s managing partner, said in the letter to Mark Penn, CEO of MDC Partners. “Given your apparent influence over various aspects of the proposed combination of MDC and Stagwell, we want to clearly lay out our concerns for you. Unlike MDC’s [board] special committee, you seem to have the ability to address our reservations if Stagwell truly wants to combine with MDC on fair and reasonable terms.”
Stagwell, MDC’s largest shareholder, issued its own statement to Ad Age challenging Indaba’s assertions.