The Internet research and measurement firm announced plans toN.Y.-based Jupiter for $71 million in October. The deal included an agreement to loan Jupiter up to $25 million, subject to certain conditions, replacing a credit arrangement between Jupiter and Tod Johnson, its chairman. The deal would have consolidated much of the Internet measurement business into NetRatings' hands.
The collapse of the deal comes at a difficult time for Jupiter. Its stock has trickled down from a 52-week high of $5.50 to close at 81 cents on Friday, putting its market capitalization at $28.9 million. The company had $15.9 million in cash on hand as of Dec. 31, having used $10.9 million during the most recent quarter.
In a separate release, Jupiter said that it has retained Robertson Stephens to advise it in exploring other options.
The companies said today that they decided to call off the deal "after extensive discussions" with the FTC.
"The FTC staff has indicated that it would strongly recommend that the FTC challenge the loan and security agreement (and reject) alternative loan structures proposed by the companies," the companies said. "Additionally, the FTC staff has indicated that it would recommend that the FTC challenge the acquisition and seek a preliminary injunction enjoining consummation of the acquisition."
An FTC representative had no comment, citing a policy not to discuss proposed or pending mergers.
Jupiter and NetRatings executives said they "disagreed" with the FTC's conclusions. Jupiter CEO Robert Becker said that without the loan agreement, his company wasn't "in a position to contest the FTC in a lengthy court challenge."
At the time of its proposed acquisition of Jupiter, NetRatings also announced it had agreed to purchase the interests of ACNielsen's eRatings.com service that it didn't own. The fate of that transaction has not been determined, according to executives from Milpitas, Calif.-based NetRatings.