The board of Irvine-based Autobytel Inc. urged shareholders to reject the unsolicited $15.8 million buyout offer from a major shareholder of the automotive Internet marketing company.
Infield Acquisitions Inc., part of Austin-based Trilogy Enterprise Inc., made the offer to shareholders last week.
The offer is about 30% higher than what Autobytel’s shares have traded at on average for the past 30 days.
Chief Executive Jeffrey H. Coats asked shareholders to reject the offer, which he called “grossly inadequate.”
The company’s shares initally dropped Monday but finished up nearly 10% on a market value of $23 million.
Trilogy, through its affiliates, is Autobytel’s second-largest shareholder at 7.4%, after Chicago-based Coghill Capital Management LLC.
Privately held Trilogy uses Web and mobile technology to determine what consumers want, which helps automotive and telecommunications companies target customers.
Trilogy issued a letter to Jeffery Coats, Autobytel’s chief executive, acknowledging the difficult market for automotives, but questioned the company’s strategy for dealing with it.
Autobytel ended a three-month bid in January to try and sell the auto marketing company, but continued to look at alternatives.
The company originally said in January that “shareholder value would not be maximized” by pursuing a sale.
Also in January, the company struck a deal with Coghill Capital, its largest investor, which allowed it to acquire more of Autobytel in exchange for not seeking changes to the company’s board, management and strategy.
The deal with hedge fund investor Clint Coghill allowed him to acquire more than 15% of the auto marketer without triggering provisions of the company’s anti-takeover plan.
The company’s shares have been in a prolonged slump since 2004, a trend made worse by 2008’s dramatic downturn in auto sales.
The stock is down 80% in the past year.
