Angie's List Inc.'s stock dropped 4.8% in premarket trade Tuesday, after the consumer-reviews website said it would not pursue IAC/InterActiveCorp's buyout proposal. The company's board of directors determined it would be "premature" to conclude a deal was in the best interest of shareholders, until it can full evaluate its "profitable growth plan." The company said the $8.75-per-share unsolicited buyout bid made by IAC "dramatically undervalues the company," as it represented just a 10% premium to the stock price at the time. "The Board does not believe it is in the best interest of Angie's List shareholders to rush to judgment and that doing so would be contrary to our fiduciary duties," said Chief Executive Scott Durchslag. "The Board believes that it should have the opportunity to fully evaluate our Profitable Growth Plan and should share that plan with shareholders before reaching a decision as to whether to engage in a transaction with IAC or any other party." The stock has soared 25% since IAC proposed the buyout after the Nov. 11 close, and has more than doubled in the past three months. The stock closed Monday at $9.83, which is 12% above IAC's buyout bid.
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