Monster Falls as Sale Process Continues Without Buyer
Monster Worldwide Inc., the Internet-recruiting service exploring a sale, fell the most in almost three months after saying that it wasn’t certain when -- or if -- it would find a buyer.
The shares dropped 7 percent to $5.44 at the in New York, for the biggest decline since Nov. 15. The stock had lost 22 percent since March 5, when the company said it was exploring a sale.
At the time, Chief Executive Officer Sal Iannuzzi said he would consider selling the company as a whole or in parts and hired Stone Key Partners LLC and Bank of America Corp.’s Merrill Lynch to help. Since then, Iannuzzi has cut costs and sold the company’s ChinaHR unit as a buyer failed to materialize.
“It’s slower than I would have anticipated,” Iannuzzi said on a conference call with investors today. “I can’t guarantee that there’s anything of interest or appropriate interest to bring to our board for presentation.”
Iannuzzi said the company cast an “extremely wide net” and spoke to both strategic and financial companies about a potential sale.
Monster has been trimming its workforce and cutting costs after European economic turmoil caused clients to pare use of its products and companies such as LinkedIn Corp. offer alternative recruitment tools. It has exited operations in Brazil, Mexico and Turkey to concentrate more resources on more profitable markets in North America, Europe, Korea and India, the company said today.
“They turned out not to be important to potential buyers,” Iannuzzi said of the developing markets Monster is exiting.
The New York-based company said in a statement today that it sold its ChinaHR unit to Saongroup Ltd., while retaining a 10 percent minority stake. No terms were disclosed. Monster announced plans to seek a buyer for the unit in November as it worked to shed less lucrative businesses.
The decision to exit China and other developing market businesses will cut costs about $35 million, after a $50 million reduction in revenue and an $85 million drop in expenses, the company said. Previously announced restructuring will cut another $50 million in expenses annually.
Continuing to invest in developing countries while the U.S. and Europe face sluggishness in growth would have eventually forced Monster to cut back in its core markets, something the company didn’t want to do, Iannuzzi said.
“Those were difficult decisions,” he said on the call. “Long term, some of those markets may -- would provide significant potential for us.”
Fourth-quarter sales fell 10 percent to $211.2 million, Monster said in the statement, less than the average analyst estimate of $211.9 million, according to data compiled by Bloomberg. Profit excluding some items was 8 cents a share, matching the average estimate.
Monster forecast first-quarter earnings from continuing operations of 6 cents to 10 cents a share, compared with the analysts’ average 8 cent projection.
In January 2012, Monster said it planned to trim its workforce by about 400 jobs, or 7 percent, according to a statement at the time.
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