Canada's Cyberplex Inc, a provider of web advertising solutions, said its offer to buy Burst Media Corp for $16.5 million was rejected by the U.S.-based online advertising firm's board.
Cyberplex said it had offered to buy Burst Media shares for 12 pence per share, representing an 81.1 percent premium to Wednesday's closing price of 6.625 pence.
Our proposal had the support of approximately 40 percent of Burst's shares, or approximately 56 percent when excluding shares held by management of Burst, yet we were unable to engage with the Board of Directors to further a potential transaction or to take the proposal to Burst's entire shareholder base, Cyberplex chairman Vernon Lobo said.
Cyberplex said it hopes Burst Media's board would reconsider its position.
Separately, Burst Media confirmed the approach from Cyberplex, but said the unsolicited offer did not reflect the worth of the company.
The board fully evaluated the indicative approach and concluded that it was opportunistic and unreflective of the worth of the Burst businesses, Burst Media said in a statement in response to a rise in its share price.
The company also said it was not in talks with Cyberplex regarding the offer. At 1322 GMT, Burst Media shares were up 39.6 percent at 9.25 pence, its highest since mid-December 2007.
(Reporting by Shivani Singh and Kumar Alagappan in Bangalore; Editing by Anil D'Silva, Jarshad Kakkrakandy)