For those that care about such things, the Trulia / Market Leader, Inc. merger is progressing steadily. Market Leader Inc. indicates that revenue was up 24 percent from a year ago during the second quarter of 2013 (as compared to the second quarter of 2012), to $13.7 million, and that a pending $355 million acquisition of the company by Trulia remains on track to close during the third quarter. The Kirkland, Wash.-based maker of marketing software for real estate pros reported a $2.8 million net loss, a 29 percent increase from the same quarter a year ago, as $1.1 million in costs associated with the pending acquisition helped bloat expenses by 24.5 percent from a year ago.
The merger is expected to be completed during the third quarter of 2103. The merger must still be approved by Market Leader shareholders.
Three lawsuits seeking class-action standing to represent Market Leader shareholders are seeking injunctions that would suspend the acquisition. The cases, which have been consolidated by a King County Superior Court, allege, in part, that Market Leader’s board of directors didn’t shop the firm around to ensure that it got the best deal.
Shares in Market Leader surged above $13 in trading today, hitting a 52-week high of $13.46 at one point. Shares in Trulia also hit an all-time high of $48.40 today.
If the merger doesn’t go through by Oct. 31 or shareholders don’t approve it, the agreement may be terminated and Market Leader would be subject to a $15 million termination fee.
Mergers often generate litigation or threats of litigation by shareholders, which in many cases are resolved. The (threat of) lawsuits are not a detriment to the proposed merger since it is quite common that shareholders threaten legal action. I would hazard a guess that there will be many more mergers in the real estate world in the future.
Paddy Deighan J.D. Ph.D
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