Bankrate shareholder says Apax offer is 'inadequate,' deal is 'unfair'

By Lisa Kerner

Charlotte, N.C., Aug. 13 - Bankrate Inc. shareholder Coatue Management, LLC is against the company's proposed sale to a group that includes Apax Partners and Bankrate management.

The $28.50-per-share offer price is "inadequate" and the sale is "grossly unfair to existing shareholders," Coatue said in a letter to Bankrate's board on Thursday included in a schedule 13D filed with the Securities and Exchange Commission.

According to Coatue, the offer price does not adequately reflect "either the company's leadership position in the online consumer finance industry or its future prospects."

Coatue also believes that Bankrate management negotiated a price in its favor and that the negotiation process was "seriously flawed," the letter said.

In addition, Coatue said the structure of the deal discourages competing bids.

"The $30 million breakup fee represents more than $1.50 per share and more than 5% of the offer price, which is clearly excessive and not consistent with normal market practice," Coatue said.

Bankrate's board unanimously approved the transaction, which is slated to close in the third quarter of 2009.

As previously reported, Apax's tender offer for Bankrate ends at midnight on Aug. 24.

Coatue has a 9.5% stake in the North Palm Beach, Fla., online consumer banking and personal finance network.

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