The board of Autobytel Inc. is recommending stockholders reject a buyout offer from Trilogy Enterprises Inc., calling the cash offer of 35 cents per share grossly inadequate.
In a statement filed today with the Securities and Exchange Commission, the board said the Trilogy offer represents a 43 percent discount when compared with Autobytels current cash position and net working capital.
Shares closed at 47 cents Friday and were trading at 51 cents at 1:48 p.m. ET today.
Autobytel, of Irvine, Calif., is a third-party lead generator for auto dealers and manufacturers. Trilogy owns 7.4 percent of Autobytel and is its second-largest shareholder. The Austin, Texas, company makes software that helps auto companies analyze sales leads.
Autobytel said the Trilogy offer fails to take into account additional sources of cash available to Autobytel from a legal settlement; funds held in escrow from the 2008 sale of its AVV unit, which makes software that helps dealers manage Internet sales leads; and the value of patents and other intellectual property.
The company called baseless Trilogys stand that Autobytel could run out of cash by the end of 2010.
The Autobytel board said it also had evaluated other offers.
During its evaluation process, the board considered several offers and expressions of interest made by potential suitors. The company believes that when viewed comprehensively, these offers and expressions of interest established relative value for the company substantially above Trilogys offer price.