June 7 (Bloomberg) -- RDG Capital LLC, the New York investment firm that owns a stake in Digital Generation Inc., is weighing an offer for the advertisement-management company, said RDG founder Russell Glass.
“RDG has been in discussions with the company regarding its potential interest in exploring a takeover bid,” Glass said today in an interview. A decade ago, he worked as president of Icahn Associates Corp., the hedge fund of billionaire investor Carl Icahn.
RDG recently amassed a 4.9 percent stake in the Irving, Texas-based company, Glass said. Digital Generation, which operates a network linking advertisers to broadcasters and websites, rejected an offer of more than $20 a share from Extreme Reach Inc., people familiar with the process said yesterday.
That per-share offer was more than twice Digital Generation’s stock price the day before Bloomberg News reported the bid. The company has worked with Goldman Sachs Group Inc. to identify suitors, people with knowledge of the matter have said. The sale process attracted interest from Hellman & Friedman LLC and other private-equity firms, another person with knowledge of the matter said yesterday.
“Digital Generation should engage with potential buyers, including Extreme Reach,” said Glass. “We talked to other shareholders and they share our view.”
A representative at Digital Generation didn’t respond to a request for comment.
The stock dropped 1.8 percent to $11.91 as of 4 p.m. in New York. Yesterday it rose 26 percent following the takeover report, giving the company a market value of $334.5 million.
Digital Generation tried to sell itself a year ago, when its name was DG FastChannel, people close to the situation said at the time. That process stalled after Digital Generation’s acquisition of MediaMind Technologies Inc. last year, the same person said.
Needham, Massachusetts-based Extreme Reach operates a network connecting more than 2,000 advertisers and agencies to major broadcast networks, its website shows. Co-founder John Roland had served as president of Digital Generation’s predecessor before starting Extreme Reach.
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