(Bloomberg) -- A shareholder in Squarespace Inc. has come out against its $6.9 billion takeover by Permira, arguing the website-builder is selling for cheap after running a flawed sale process.
Permira’s May agreement to buy Squarespace for $44 a share materially undervalues the company, Glazer Capital said Wednesday in a letter to the board. Two industry standard valuation analyses were omitted from a fairness opinion for the transaction, resulting in significant undervaluation, according to the letter. Those opinions would value Squarespace at $49.30 a share or more, Glazer said.
The deal is “the product of a self-serving go-private process engineered by a founder-CEO that presently controls, and desires to retain control over, Squarespace’s destiny,” to the detriment of minority shareholders, Glazer said in the letter. The acquisition was “orchestrated to deliver the company into the arms of a handpicked private equity consortium,” the investor said.
The New York-based investment firm said it controls approximately 5.4% of the shares owned by minority shareholders. It intends to vote against the transaction at an upcoming Squarespace special meeting.
Representatives for Squarespace and Permira did not immediately respond to request for comments.
The transaction is one of the largest leveraged buyout deals this year. A small group of private credit lenders would provide $2.65 billion credit facility to help finance the transaction, Bloomberg News has reported.
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