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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
MECKLERMEDIA CORPORATION
(NAME OF SUBJECT COMPANY)
MECKLERMEDIA CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
584007-10-8
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ALAN M. MECKLER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MECKLERMEDIA CORPORATION
20 KETCHUM STREET
WESTPORT, CONNECTICUT 06880
(203) 226-6967
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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COPIES TO:
WILLIAM J. GRANT, JR., ESQ.
WILLKIE FARR & GALLAGHER
787 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
(212) 728-8000
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This Amendment No. 1 to the Solicitation/Recommendation Statement on
Schedule 14D-9, initially filed on October 15, 1998 (as amended, the "Schedule
14D-9"), of Mecklermedia Corporation, a Delaware corporation (the "Company"),
relates to the offer by Internet World Media, Inc. (the "Purchaser"), a Delaware
corporation and a wholly-owned subsidiary of Penton Media, Inc. ("Parent"), a
Delaware Corporation, to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares") of the Company, at a purchase price of
$29.00 per Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase of
Purchaser and Parent, dated October 15, 1998, and in the related Letter of
Transmittal. This Schedule 14D-9 is being filed on behalf of the Company.
ITEM 3. IDENTITY AND BACKGROUND.
The fourth paragraph of Item 3(b) is hereby amended and restated in its
entirety as follows:
Interests of Certain Persons in the Transaction. Certain members of the
Company's management and Board of Directors, including Mr. Alan M. Meckler, the
Company's Chairman and Chief Executive Officer, may be deemed to have certain
interests in the Merger or the iWorld Transaction that are in addition to their
interests as stockholders of the Company generally. The Company's Board of
Directors (the "Board") was aware of and discussed these interests in connection
with its consideration and approval of the Merger Agreement and the iWorld
Transaction. In considering the recommendation of the Board with respect to the
Offer and the Merger, the stockholders of the Company should be aware of these
interests which may present actual or potential conflicts of interest.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(b)(i) is hereby amended and supplemented by replacing the fifth
paragraph thereof in its entirety with the following:
Parent's decision to retain only a part of the Company's Internet Web site
business (the "Web Site") was based on Parent's belief that its operation of the
Web Site would be inconsistent with Parent's strategic direction. In particular,
Parent's core competencies, and its primary motivation for its acquisition of
the Company, lie in industry trade shows and print publications. Similarly,
Parent does not believe it currently has the required expertise to maximize the
Web Site's potential. Furthermore, while Parent does maintain several Web sites,
their primary function is to act as a medium of advertising and publicity for
Parent's print publications and trade shows. The Company and Mr. Meckler,
however, believe that the Web Site, which is narrowly tailored to attract
Internet industry experts and is designed to operate as a stand-alone operating
business in addition to supporting the Company's print publications and trade
shows, fills an important niche in the Internet industry and is a prototype of a
business-to-business Internet publication model which is capable of deriving
significant revenues from advertising, electronic commerce, licensing,
subscription and other Internet-related activities. Parent was also unwilling to
commit the substantial resources to the Web Site which Parent, Mr. Meckler and
the Company believe will be necessary in order for the Web Site to become
profitable, and did not wish to record the negative effect of the Web Site's net
losses on Parent's earnings (see below). Parent was reluctant, however, to
divest itself entirely of the Web Site following consummation of the Merger due
to the strategic importance of the Web Site to the Company's trade show and
print publication businesses, particularly in promoting and distributing
information on the trade shows and print publications, attracting on-line
subscriptions to the print publications and attracting on-line registrations for
the trade shows. Parent also wished to retain the possibility of sharing in the
Web Site's potential to generate earnings in the future.
The parties' willingness to enter into a letter of intent pursuant to which
Mr. Meckler would purchase a 50% equity interest in the Web Site from Parent
following the consummation of the Merger was substantially based, therefore, on
(i) Mr. Meckler's beliefs about the potential future profitability of, and his
desire to continue to develop, the Web Site, (ii) Parent's desire to maintain a
partial interest in the Web Site and (iii) Parent's belief that Mr. Meckler was
a uniquely qualified and particularly desirable purchaser and manager of the Web
Site due to (A) his willingness to purchase a portion of the Web Site, which
eliminated Parent's need to incur the expense of finding a qualified third-party
buyer, (B) his experience in managing and realizing the potential of the Web
Site, (C) the fact that Parent was able, as part of the overall transaction, to
negotiate a services agreement with
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Mr. Meckler to continue the Web Site's support of the trade shows and print
publications to be acquired by Parent, (D) the fact that, as set forth in Item 8
below, Mr. Meckler was willing to pay a price for his equity interest in the Web
Site that was considerably higher than the price which the Company's historic
accounting treatment of, and acquisition costs for, the Web Site would indicate
to be a fair price, and (E) the fact that, as a result of tendering his Shares
in the Offer, Mr. Meckler would have ready access to funds to finance the
purchase of his equity interest in the Web Site.
Following a due diligence review by Parent of the Company, negotiations of
the Merger Agreement and the related agreements commenced on September 27, 1998,
when the Company furnished Parent with a draft of a merger agreement. During the
course of negotiations, Parent raised a concern that had arisen in the course of
its accounting due diligence review. Parent indicated its ownership of a 20% or
greater interest in the entity that would operate the Web Site would require
that Parent reflect its pro-rata share of income or loss of the Web Site in
Parent's consolidated financial statements. Because the Web Site had
historically operated at a net loss, such accounting treatment would have had an
immediate and substantial negative effect on Parent's earnings, whereas reducing
its ownership of the Web Site to less than 20% would enable Parent to exclude
the Web Site's results from Parent's consolidated earnings. Mr. Meckler then
indicated that he would be willing to purchase an increased equity interest in
the Web Site; as a result, Parent and Mr. Meckler agreed that Parent would
increase the percentage ownership it would sell to Mr. Meckler in the Web Site
to 80.1% in exchange for an increase in the sales price to $18 million and the
issuance to Parent of a three-year warrant to increase Parent's investment in
the Web Site in the future by an additional 10%, thus permitting Parent to share
to a greater extent in the Web Site's potential future growth. The price per
Share remained at $29.00 at all times during the course of the negotiations
regarding the Web Site.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 is hereby amended and supplemented by inserting the following at the
end thereof:
(d) Additional Fairness Considerations
Mr. Meckler has stated, both in meetings with Parent and in presentations
to the Company's Board of Directors, that he believes that the Offer, the Merger
and the iWorld Transaction taken together are, and the iWorld Transaction itself
is, fair to the Company and to the Company's unaffiliated security holders,
including the $18 million consideration to be paid by Mr. Meckler for an 80.1%
equity interest in iWorld. In addition to the factors described in Item 4 of
this Schedule 14D-9, in determining that the iWorld Transaction was fair, Mr.
Meckler also considered (i) that the agreed $22.5 million valuation of iWorld
(based on his payment of $18 million for an 80.1% equity interest in iWorld) is
significantly higher than the valuation of iWorld obtained by reference to the
Company's historical accounting treatment of the assets which will be
contributed to iWorld following the consummation of the Merger, including the
fact that the agreed $22.5 million valuation represents a multiple of greater
than six times the revenues and three times the tangible assets of the Web Site
for the fiscal year ended September 30, 1998, and represents a value per page
view on the Web Site which is substantially greater than the average price per
page view paid by the Company to acquire the Web sites constituting the Web Site
since 1995 and (ii) that his agreeing to purchase an 80.1% interest in iWorld
was deemed necessary in order to (a) reach a definitive agreement with Parent
regarding the purchase of the Company (in light of Parent's reluctance to retain
a 20% or greater equity interest in iWorld due to the resulting negative impact
of iWorld's financial results on those of Parent) and (b) maximize the
consideration per share to be paid to the Company's stockholders in the Offer
and Merger. Mr. Meckler's stated belief regarding the fairness of the Offer, the
Merger and the iWorld Transaction does not constitute a recommendation by Mr.
Meckler in his personal capacity that the Company pursue such transactions or
that any stockholder of the Company accept the Offer or vote to approve such
transactions.
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding the following:
Exhibit 13 Letter to Stockholders of the Company, dated November 12,
1998.**
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Mecklermedia Corporation
By: /s/ ALAN M. MECKLER
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Name: Alan M. Meckler
Title: Chairman of the Board
and Chief Executive Officer
Dated: November 12, 1998
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INDEX TO EXHIBITS
Exhibit No. Exhibit
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13 Letter to Stockholders of the Company, dated
November 12, 1998
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Exhibit 13
Mecklermedia
THE INTERNET MEDIA COMPANY
November 12, 1998
Dear Fellow Stockholders:
This letter and the attached Amendment No. 1 to Schedule 14D-9 supplements
the letter and the Schedule 14D-9 (as amended, the "Schedule 14D-9") of
Mecklermedia Corporation (the "Company") which were sent to you on October 15,
1998, in connection with the offer by Internet World Media, Inc. (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Penton
Media, Inc. ("Parent"), a Delaware Corporation, to purchase all outstanding
shares of Common Stock, par value $.01 per share (the "Shares") of the Company,
at a purchase price of $29.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase of Purchaser and Parent, dated October 15, 1998, and in the
related Letter of Transmittal.
This Amendment No. 1 to the Schedule 14D-9 is being furnished to you to
provide certain additional information with respect to the iWorld Transaction
relevant to making an informed decision in connection with the Offer and the
Merger. We urge you to read these materials carefully and in their entirety.
Very truly yours,
/s/ Alan M. Meckler
Alan M. Meckler
Chairman of the Board and Chief
Executive Officer
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Mecklermedia Corporation Phone: 203-226-6967 E-Mail: [email protected]
20 Ketchum Street Fax: 203-454-5840 URL: http://www.internet.com
Westport, CT 06880
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