MySpace Merger Challenge Dismissed
The forces aligned behind overturning News Corp.'s 2005 purchase of MySpace suffered a blow Monday, as a Los Angeles Superior Court dismissed challenges to the merger. But News Corp. must still fight a federal case against the company.
Brad Greenspan, founder and former CEO of Intermix, the company that News Corp. bought out last year to purchase MySpace, has spearheaded the challenges. He and his supporters have set up FreeMySpace.com, a site where he argues the deal was one of "the largest merger and acquisition scandals in U.S. history."
Greenspan claims the parties involved hid the true value of MySpace in order to allow News Corp. to purchase it at a low price. According to "The MySpace Report," posted on that site, the true value of MySpace should be around $20 billion.
However, Superior Court Judge Carolyn B. Kuhl disagreed with Greenspan's position, ruling the merger was lawful and had been approved by a majority of Intermix shareholders. Additionally, she rejected the plantiff's claims of withheld information.
News Corp. said it was pleased by the ruling, and chalked up the challenge to "unchecked envy" on Greenspan's part. Additionally, former Intermix CEO Richard Rosenblatt responded forcefully to Greenspan's charges of impropriety during the merger process.
"I have exercised great restraint in not responding to Mr. Greenspan's baseless and defamatory claims about the propriety of the News Corp. acquisition and my role in the transaction, with the expectation of being vindicated by a court of law," he said.
"Lost in all the rhetoric is that we delivered to the shareholders, including Mr. Greenspan, a nearly 700% increase in stock price," Rosenblatt continued.
Greenspan had no public comment on the ruling as of press time.