Monster Expecting 14% Top Line Decline In Q3; Randstad Deal On Track

Monster Worldwide (NASDAQ:MWW) released some preliminary Q3 results yesterday, hinting at an overall revenue decline of around 14% year-over-year (y-o-y) driven by continued weakness in North America. The company expects North America sales to have declined about 16% y-o-y to around $100 million, driving down global Q3 2016 revenue to around $143-145 million compared to $167.1 million in the prior year quarter. This implies that international revenues are expected to have declined around 5% to $45 million last quarter. It is important to note that Monster’s top line declines have consistently increased in the first three quarters this year-  from 9% in Q1 to 14% in Q3 2016. ^[1]

We will have to wait until October 21st for more details on the company’s third quarter performance, when it is scheduled to release its comprehensive results. 

Acquisition By Randstad On Track

As part of its second quarter earnings release in August, Monster Worldwide announced that it had agreed to be acquired by Randstad Holding for $429 million at a purchase price of $3.40 per share. This was around 23% ahead of the company’s trading price on August 8th, the last trading day prior to the announcement, and represented an almost 30% premium over the company’s 90-day average stock price.

However, Monster’s largest shareholder MediaNews Group Inc., with an ownership interest of 11.6% of the company’s outstanding shares, wasn’t pleased with the acquisition price considering the company’s stock price touched a high of $7.65 in October 2015 and the company bought back shares at an average price of about $6.00 in December 2015. In fact, MediaNews Group Inc. released an open letter last month to dissuade shareholders from accepting the $3.40 acquisition price, citing an arbitrary and low valuation.

Despite this resistance, the acquisition seems to be on track considering Randstad recently filed a statement with the SEC expressing confidence in its proposed offer ^[2] and Monster also stated in its latest press release that it expects the acquisition to close this quarter.

1. Monster Worldwide Announces Preliminary Revenue for the Third Quarter 2016, Monster, October 6 2016 [↩]
2. Randstad reinforces support for Monster deal, Staffing Industry Analysts, October 4 2016 [↩]