Interpublic Group (NYSE: IPG), a New York holding company for advertising agencies, has announced the preliminary settlement of the securities class action pending against the company in the S.D.N.Y. The case is the result of a restatement IPG did in August 2002 for the five years from 1997 to 2001, which corrected inter-company charges that had been wrongly declared as income for the European offices of one of IPG’s agencies.
The settlement, which still must be approved by the court, is for $115 million in cash and stock ($20 million cash; $95 million stock at $14.50 a share). According to the announcement, the “parties have also agreed that, should the price of Interpublic common stock drop below $8.70 per share prior to final approval of the settlement, Interpublic will issue at its sole discretion either additional stock or cash so that the consideration for the stock portion of the settlement will have a total value of $57 million.”
The 10b-5 Daily has previously discussed (in a post entitled “The Perfect Storm”), the court’s May 2003 denial of the motion to dismiss and (in a post entitled “The Perfect Storm Moves On” ) the court’s recent grant of class certification.
AdAge.Com also has an article on the settlement announcement.