-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L01UxjDzX4QGQtLlYMCjLnA1gsz0BCFG+BU7/c6J+nyR5QdE1lBvT7NATmpypAKl rPisryOEI2vbGYL3ewdMUg== 0000902664-07-001198.txt : 20070312 0000902664-07-001198.hdr.sgml : 20070312 20070312170018 ACCESSION NUMBER: 0000902664-07-001198 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20070312 DATE AS OF CHANGE: 20070312 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INFOSPACE INC CENTRAL INDEX KEY: 0001068875 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 911718107 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-55807 FILM NUMBER: 07688338 BUSINESS ADDRESS: STREET 1: 601 108TH AVE NE STREET 2: SUITE 1200 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4258821602 FORMER COMPANY: FORMER CONFORMED NAME: INFOSPACE COM INC DATE OF NAME CHANGE: 19980824 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SANDELL ASSET MANAGEMENT CORP CENTRAL INDEX KEY: 0001140474 IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 40 WEST 57TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2126035700 MAIL ADDRESS: STREET 1: 40 WEST 57TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D 1 sc13d.txt INFOSPACE, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------- SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Under the Securities Exchange Act of 1934 (Amendment No. )* InfoSpace, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 45678T201 - -------------------------------------------------------------------------------- (CUSIP Number) Sandell Asset Management Corp. 40 West 57th Street 26th Floor New York, NY 10019 Attention: Richard Gashler, General Counsel 212-603-5700 With a Copy to: Marc Weingarten, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10019 212-756-2000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 1, 2007 ------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 13 Pages) - -------------------- * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 2 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Castlerigg Master Investments Ltd. - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS WC - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,523,443 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,523,443 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,443 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.8% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 3 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Sandell Asset Management Corp. - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 2,771,204 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 2,771,204 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,771,204 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 8.8% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 4 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Castlerigg International Limited - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,523,443 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,523,443 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,443 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.8% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 5 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Castlerigg International Holdings Limited - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,523,443 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,523,443 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,443 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.8% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 6 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Castlerigg Global Select Fund, Limited - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,247,761 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,247,761 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,247,761 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.0% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 7 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON CGS, Ltd. - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS WC - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,247,761 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,247,761 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,247,761 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.0% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 8 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Castlerigg GS Holdings, Ltd. - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 1,247,761 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 1,247,761 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,247,761 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.0% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 9 of 13 Pages - ---------------------------- ---------------------------- - ------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON Thomas E. Sandell - ------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| (b) |_| - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ------------- ----------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Sweden - ------------- ----------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ----------- ----------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 2,771,204 ----------- ----------------------------------------------------- BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 ----------- ----------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER 2,771,204 WITH - ------------- ----------- ----------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,771,204 - ------------- ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - ------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 8.8% - ------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------- ----------------------------------------------------------------- - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 10 of 13 Pages - ---------------------------- ---------------------------- ITEM 1. SECURITY AND ISSUER This statement on Schedule 13D relates to the common stock, par value $0.0001 per share (the "Common Stock"), of InfoSpace, Inc., a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at: 601 108th Avenue NE, Suite 1200, Bellevue, Washington 98004. ITEM 2. IDENTITY AND BACKGROUND (a) The names of the persons filing this statement on Schedule 13D are Castlerigg Master Investments Ltd., a British Virgin Islands company ("Castlerigg Master Investments"); Sandell Asset Management Corp., a Cayman Islands exempted company ("SAMC"); Castlerigg International Limited, a British Virgin Islands company ("Castlerigg International"); Castlerigg International Holdings Limited, a British Virgin Islands company ("Castlerigg Holdings"); Castlerigg Global Select Fund, Limited, a Cayman Islands exempted company ("Castlerigg Global Select"); CGS, Ltd., a Cayman Islands exempted company ("CGS"); Castlerigg GS Holdings, Ltd., a Cayman Islands exempted company ("CGSH"); and Thomas E. Sandell ("Sandell"). Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings, Castlerigg Global Select, CGS, CGSH and Sandell are collectively referred to herein as the "Reporting Persons". The filing of this statement on Schedule 13D and any future amendments hereto, and the inclusion of information herein and therein, shall not be construed as an admission that any of the Reporting Persons, for the purpose of Section 13(d) of the Act or otherwise, is the beneficial owner of any shares of Common Stock in which such person does not have a pecuniary interest. (b) The principal business address for each of Castlerigg Master Investments, Castlerigg International and Castlerigg Holdings is c/o Citco Fund Services (Curacao) N.V., Kaya Flamboyan 9, P.O. Box 812, Curacao, Netherlands Antilles. The principal business address for Castlerigg Global Select, CGS and CGSH is Walker House, P.O. Box 265GT, Mary Street, George Town, Grand Cayman, Cayman Islands. The principal business address for each of SAMC and Sandell is c/o Sandell Asset Management Corp., 40 West 57th Street, 26th Floor, New York, New York 10019. (c) Castlerigg International is a private investment fund that is primarily engaged in the business of investing in securities and other investment opportunities. Castlerigg International invests substantially all of its assets indirectly in Castlerigg Master Investments, a master trading vehicle that is primarily engaged in the business of investing in securities and other investment opportunities. Castlerigg Holdings is the controlling shareholder of Castlerigg Master Investments and Castlerigg International is the controlling shareholder of Castlerigg Holdings. Castlerigg Global Select is a private investment fund that is primarily engaged in the business of investing in securities and other investment opportunities. Castlerigg Global Select invests substantially all of its assets indirectly in CGS, a master trading vehicle that is primarily engaged in the business of investing in securities and other investment opportunities. CGSH is the controlling shareholder of CGS and Castlerigg Global Select is the controlling shareholder of CGSH. SAMC is the discretionary investment manager of Castlerigg International, Castlerigg Holdings, Castlerigg Master Investments, Castlerigg Global Select, CGS and CGSH. Sandell is the controlling shareholder, Chief Executive Officer and Portfolio Manager of SAMC. Information regarding the directors, executive officers and/or control persons of Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings, Castlerigg Global Select, CGS and CGSH (collectively, the "Instruction C Persons") is set forth in Appendix III attached hereto. (d) None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 11 of 13 Pages - ---------------------------- ---------------------------- and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Castlerigg Master Investments, Castlerigg International and Castlerigg Holdings are British Virgin Islands companies. SAMC, Castlerigg Global Select, CGS and CGSH are Cayman Islands exempted companies. Sandell is a citizen of Sweden. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Funds for the purchase of the shares of Common Stock reported herein to be held by Castlerigg Master Investments and CGS were derived from their respective general working capital and margin account borrowings made in the ordinary course of business. A total of approximately $64.50 million was paid to acquire the shares of Common Stock reported herein. ITEM 4. PURPOSE OF TRANSACTION The Reporting Persons acquired the shares of Common Stock for investment purposes in the ordinary course of business because they believed the shares to be undervalued in the market. On March 12, 2007, SAMC sent a letter to the board of directors (the "Board") of the Issuer (the "March 12 Letter") thanking the Board for meeting with representatives of SAMC and expressing concern over (i) the lack of definitive plans for return of capital to shareholders from the Issuer's outsized cash balance and (ii) the Issuer's apparent complacency on cost controls. In order to maximize shareholder value SAMC recommended in the March 12 Letter that the Issuer (i) commit to at least $15 million of expense reduction by the end of 2007 and (ii) expeditiously return at least $300 million of the current cash balance to its shareholders, in the form of a $200 million Dutch tender offer at a premium to the current share price and a $100 million special dividend. SAMC suggested that, if the market fails to adequately value the Issuer or management is unable to take the steps necessary to close the value gap, the Board should immediately engage a financial advisor to sell the Issuer in whole or in part. SAMC further stated that it was currently considering its options with respect to nominating an alternative slate of directors at the Issuer's upcoming annual meeting. A copy of the March 12 Letter is attached hereto as Exhibit A and incorporated herein by reference. Except as described herein, none of the Reporting Persons has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto. Depending on the Issuer's response to the March 12 Letter, among other things, the Reporting Persons may consider proposing a slate of nominees for election as directors at the Issuer's next annual meeting. Representatives of SAMC have engaged and may in the future engage in discussions with members of the Board and management as well as with other shareholders of the Issuer and other interested parties regarding the suggestions contained in the March 12 Letter and other matters of interest to the Issuer's shareholders. Although none of the Reporting Persons has any specific plan or proposal to acquire or dispose of the shares of Common Stock, each Reporting Person at any time and from time to time may (i) acquire additional shares or securities of the Issuer, (ii) dispose of any or all of its securities of the Issuer or (iii) enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of its positions in the securities of the Issuer, depending upon an ongoing evaluation of the investment in such securities, prevailing market conditions, other investment opportunities, liquidity requirements of the Reporting Persons, and/or other investment considerations. - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 12 of 13 Pages - ---------------------------- ---------------------------- ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Each of Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings and Sandell may be deemed to beneficially own the 1,523,443 shares of Common Stock held by Castlerigg Master Investments, representing approximately 4.8% of the outstanding shares of Common Stock. Each of CGS, CGSH, Castlerigg Global Select, SAMC and Sandell may be deemed to beneficially own the 1,247,761 shares of Common Stock held by CGS, representing approximately 4.0% of the outstanding shares of Common Stock. The Reporting Persons may be deemed to be a "group" by virtue of the matters discussed in Item 4, which "group" may be deemed to beneficially own an aggregate of 2,771,204 shares of Common Stock, representing approximately 8.8% of the outstanding shares of Common Stock. The percentages used herein are based upon the 31,469,062 shares of Common Stock reported to be outstanding as of February 16, 2007 by the Issuer in its Annual Report on Form 10-K for the period ended December 31, 2006, filed with the Securities and Exchange Commission on February 16, 2007. (b) None of the Reporting Persons has sole power to vote or direct the vote or sole power to dispose or direct the disposition of shares of Common Stock. Each of Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings and Sandell has shared power to vote or direct the vote and shared power to dispose or direct the disposition of the 1,523,443 shares of Common Stock held by Castlerigg Master Investments. Each of CGS, CGSH, Castlerigg Global Select, SAMC and Sandell has shared power to vote or direct the vote and shared power to dispose or direct the disposition of the 1,247,761 shares of Common Stock held by CGS. (c) Information concerning transactions in the shares of Common Stock effected by the Reporting Persons during the past sixty days is set forth in Appendix I hereto. (d) No person other than Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings and Sandell is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock held by Castlerigg Master Investments. No person other than CGS, CGSH, Castlerigg Global Select, SAMC and Sandell is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock held by CGS. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Except as otherwise set forth herein, the Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to the securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following documents are filed as appendices and exhibits: Appendix I: Transactions Effected During the Past Sixty Days Appendix II: Joint Filing Agreement Appendix III: Information Regarding the Instruction C Persons Appendix IV: Powers of Attorney Exhibit A: Letter to Issuer's Board of Directors dated March 12, 2007 - ---------------------------- ---------------------------- CUSIP No. 45678T201 SCHEDULE 13D Page 13 of 13 Pages - ---------------------------- ---------------------------- Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 12, 2007 CASTLERIGG MASTER INVESTMENTS LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director SANDELL ASSET MANAGEMENT CORP. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Chief Executive Officer CASTLERIGG INTERNATIONAL LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG INTERNATIONAL HOLDINGS LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG GLOBAL SELECT FUND LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CGS, LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG GS HOLDINGS, LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director /s/ Thomas E. Sandell --------------------- Thomas E. Sandell APPENDIX I TRANSACTIONS EFFECTED DURING THE PAST SIXTY DAYS (All transactions were regular market transactions effected on The NASDAQ Global Select Market) - ------------- --------------- ----------- ----------- Date of Person Amount of Price per transaction effecting securities share transaction Bought/(Sold) or unit - ------------- --------------- ----------- ----------- 01/03/07 CGS 30,875 20.26 01/03/07 Castlerigg Master Investments 16,625 20.26 01/05/07 CGS 1,517 20.25 01/05/07 Castlerigg Master Investments 818 20.25 01/08/07 CGS 16,250 20.52 01/08/07 Castlerigg Master Investments 8,750 20.52 01/19/07 CGS 585 21.55 01/19/07 CGS (584) 21.74 01/19/07 Castlerigg Master Investments (316) 21.74 01/19/07 Castlerigg Master Investments 315 21.55 02/02/07 CGS 184,830 21.45 02/02/07 CGS 117,000 22.15 02/02/07 Castlerigg Master Investments 99,524 21.45 02/02/07 Castlerigg Master Investments 63,000 22.14 02/06/07 CGS 16,250 22.44 02/06/07 Castlerigg Master Investments 8,750 22.44 02/12/07 CGS 55,250 22.66 02/12/07 Castlerigg Master Investments 29,750 22.66 02/13/07 CGS 42,250 23.06 02/13/07 Castlerigg Master Investments 22,750 23.06 02/15/07 CGS 23,660 23.10 02/15/07 CGS 20,280 23.03 02/15/07 Castlerigg Master Investments 10,920 23.03 02/15/07 Castlerigg Master Investments 12,740 23.10 02/16/07 CGS 53,625 23.16 02/16/07 Castlerigg Master Investments 28,875 23.16 02/20/07 CGS 21,840 23.14 02/20/07 Castlerigg Master Investments 11,760 23.14 02/21/07 CGS 97,500 23.15 02/21/07 Castlerigg Master Investments 52,500 23.15 02/22/07 CGS 75,476 22.97 02/22/07 Castlerigg Master Investments 40,641 22.97 02/23/07 CGS 6,500 23.15 02/23/07 Castlerigg Master Investments 3,500 23.15 02/26/07 CGS 59,439 23.18 02/26/07 Castlerigg Master Investments 32,006 23.18 02/27/07 CGS 171,520 23.06 02/27/07 Castlerigg Master Investments 92,357 23.06 02/28/07 CGS 8,226 22.91 02/28/07 Castlerigg Master Investments 4,430 22.91 03/01/07 CGS 171,072 23.13 03/01/07 Castlerigg Master Investments 92,117 23.13 03/02/07 CGS 172,082 23.27 03/02/07 Castlerigg Master Investments 92,660 23.27 03/05/07 CGS 92,547 23.46 03/05/07 Castlerigg Master Investments 49,833 23.46 03/06/07 Castlerigg Master Investments 14,268 23.92 03/06/07 CGS 7,683 23.92 03/08/07 Castlerigg Master Investments 520 24.79 03/08/07 Castlerigg Master Investments 20,150 24.91 03/08/07 CGS 10,850 24.91 03/08/07 CGS 280 24.79 03/09/07 Castlerigg Master Investments 30,000 25.10 03/09/07 Castlerigg Master Investments 2,500 25.19 03/09/07 Castlerigg Master Investments 2,100 25.10 03/09/07 CGS 270,000 25.10 03/09/07 CGS 22,500 25.19 03/09/07 CGS 18,900 25.10 03/12/07 Castlerigg Master Investments 15,915 25.47 03/12/07 CGS 143,243 25.47 APPENDIX II JOINT FILING AGREEMENT The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D may be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate. Dated: March 12, 2007 CASTLERIGG MASTER INVESTMENTS LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director SANDELL ASSET MANAGEMENT CORP. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Chief Executive Officer CASTLERIGG INTERNATIONAL LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG INTERNATIONAL HOLDINGS LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG GLOBAL SELECT FUND LIMITED By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CGS, LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director CASTLERIGG GS HOLDINGS, LTD. By: /s/ Thomas E. Sandell --------------------- Thomas E. Sandell, Director /s/ Thomas E. Sandell --------------------- Thomas E. Sandell Appendix III Information Regarding the Instruction C Persons Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings, CGS, CGSH and Castlerigg Global Select have no executive officers or directors other than as follows: Sandell serves as a director of Castlerigg Master Investments, SAMC, Castlerigg International, Castlerigg Holdings, CGS, CGSH and Castlerigg Global Select and as an executive officer of Castlerigg International and SAMC. Daniel Mignon serves as a director of Castlerigg Master Investments, Castlerigg International, Castlerigg Holdings, CGS, CGSH and Castlerigg Global Select. InterCaribbean Services Ltd. serves as a director of Castlerigg Master Investments, Castlerigg International and Castlerigg Holdings. Timothy O'Brien and Richard Gashler serve as executive officers of SAMC. Hilmi Unver serves as a director of CGS, CGSH and Castlerigg Global Select. To the best of the Reporting Persons' knowledge, none of the Instruction C Persons during the last five years has been convicted in a criminal proceeding (excluding traffic violations or other similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of the Instruction C Persons owns any shares of Common Stock.
- ----------------- -------------------- ---------------------- -------------------- Name Principal Address Citizenship / Occupation Place of Organization - ----------------- -------------------- ---------------------- -------------------- Sandell See Item 2 See Item 2 See Item 2 - ----------------- -------------------- ---------------------- -------------------- Mignon Executive of an Le Prince de Galles Belgium investment manager 10 Avenue de Grande- Bretagne MC-98000 Monte-Carlo MONACO - ----------------- -------------------- ---------------------- -------------------- InterCaribbean Fund Administrator c/o Citco BVI Limited Curacao, Services Ltd. Citco Building Netherlands Wickhams Cay Antilles PO Box 662 Road Town, Tortola British Virgin Islands - ----------------- -------------------- ---------------------- -------------------- O'Brien Chief Financial 40 West 57th Street, United States Officer of 26th Floor SAMC New York, New York 10019 - ----------------- -------------------- ---------------------- -------------------- Gashler General Counsel 40 West 57th Street, United States of SAMC 26th Floor New York, New York 10019 - ----------------- -------------------- ---------------------- -------------------- Unver Portfolio Manager 98 rue de Saint-Jean Switzerland case postale 5240 CH-1211 Geneve 11 Switzerland
Appendix IV POWERS OF ATTORNEY POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Castlerigg Master Investments Ltd., whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CASTLERIGG MASTER INVESTMENTS LTD. By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Sandell Asset Management Corp., whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 SANDELL ASSET MANAGEMENT CORP. By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Castlerigg International Limited, whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CASTLERIGG INTERNATIONAL LIMITED By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Castlerigg International Holdings Limited, whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CASTLERIGG INTERNATIONAL HOLDINGS LIMITED By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Castlerigg Global Select Fund, Limited, whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CASTLERIGG GLOBAL SELECT FUND, LIMITED By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that CGS, Ltd., whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CGS, LTD. By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Castlerigg GS Holdings, Ltd., whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as its attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 CASTLERIGG GS HOLDINGS, LTD. By: Sandell Asset Management Corp. its Investment Manager By: /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell Chief Executive Officer POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that Thomas E. Sandell, whose signature appears below, constitutes and appoints each of Timothy O'Brien, Richard A. Gashler and Jamil French as his attorney-in-fact and agent for the undersigned solely for the purpose of executing reports required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and filing the same, with exhibits and appendices thereto, and other documents in connection therewith, with the Securities and Exchange Commission, thereby ratifying and confirming all that each said attorney-in-fact may do or cause to be done by virtue hereof. Dated: March 12, 2007 /s/ Thomas E. Sandell ------------------------------ Thomas E. Sandell EX-99 2 ex99.txt LETTER TO INFOSPACE, INC. [Sandell Asset Management Letterhead] March 12, 2007 By Hand Delivery InfoSpace, Inc. 601 108th Avenue NE, Suite 1200 Bellevue, Washington 98004 Attention: Mr. Jim Voelker Chairman and Chief Executive Officer Dear Jim, Thank you for taking the time to meet with us last week. As you are aware, Sandell Asset Management Corp. and certain funds managed by Sandell, are the beneficial owner of 8.8% of INSP's common stock, making us the largest single stockholder. As such, we are very interested in management and the board's plans to maximize the value of the company's assets. While we agreed on many topics, we are concerned by the lack of definitive plans for return of capital from the company's outsized cash balance and the apparent complacency on cost controls which obscures the profitability and cash flow strength from the company's search/directories segment and impairs the value of the company's largest asset, its >$1 billion NOL carry-forward. At the meeting, we were encouraged by management's clear focus on operating and growing the business profitably, particularly with respect to the remaining core mobile segment. As we discussed, we firmly believe that core mobile should only be grown on a cash flow neutral basis with very limited acquisition capital expenditures. As we also discussed, we would like the company to increase its focus on cost control. We understand that management is working diligently to reduce expenses as a result of the restructuring of the mobile division but would like to see the cost reductions extended to the entire enterprise. Many cost categories are undoubtedly legacy expenses inherited from a time when INSP was a much larger company, and need to be addressed. Specifically, we recommend that the company immediately commit to at least $15 million of expense reduction by the end of 2007, which we believe would add up to $5 of incremental value to the stock. Further, we continue to believe that the company should expeditiously return at least $300 million of the current cash balance to shareholders in the form of a $200 million Dutch tender offer at a premium to the current share price and a $100 million special dividend. Our research indicates that these actions would not have any negative impact on your ability to utilize your NOLs going forward. We believe that a large buyback and special dividend would send a very positive signal to the market that the company feels the problems of the past year are behind it and that management and the board are focused on enhancing shareholder value. We believe that the inherent value of INSP is $35/share and the company could be worth up to $41 in a sale or break-up. We believe the market assigns a discount to each of INSP's four primary assets for the following reasons: 1. CASH - The market is not giving full value to the company's $12/share cash balance due to fear that management may waste the cash on a dilutive acquisition to replace the growth engine lost at the mobile business. We were encouraged by your statements that the company intends to do no such thing. 2. NOLS - The share price reflects virtually no value to the >$1 billion of NOLs. This is likely due to uncertainty over whether the company will be run for profitability or growth. With its current revenue and asset mix, management's lowest risk strategy would be to focus on maximizing profitability and selectively adding profitable cash flowing businesses that complement the search/directories business. Without an unrelenting focus on costs, this asset will be almost worthless. 3. ONLINE - The true value of the online segment is being clouded by the confusing segment reporting and excessive corporate costs which mask the true earnings power of this business. Further concern over growth prospects from last quarter's revenue decline is likely holding the value back. With industry leading 66% gross margins, we would expect this business to be able to earn at least a 40% EBITDA margin if it were run at optimal efficiency. We expect that better segment disclosure and a return to positive top line growth should result in improved valuation. 4. MOBILE - The stock price implies investors are assigning a zero value to this business even though there is still a stable core business outside of the affected content/ringtone business. Further, this segment should be a very attractive acquisition candidate due to its strategic positioning with the major mobile carriers and we think Infospace should investigate the possibility of divesting this business
Metric Multiple Value Per Share* Assumptions -------------------------------------------------------------------------------------------------------- Operating Segments Online $76MM EBITDA 8.0x $608.0 $23.20 $190M Revenue, 40% EBITDA Margins Mobile $45MM Revenue 2.5x $112.5 $4.29 Attractive strategic position and growth prospects NOLs --- -- $150.0 $5.72 NPV based on improved profitability Special Dividend $100MM -- $100.0 $3.82 One-time dividend Remaining cash balance $102MM -- $101.9 $3.89 Assumes $200M in Dutch Tender, $100M Dividend -------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ Break-up Value $1,045.3 $40.92 less: Corporate Overhead $(20)MM of EBITDA 8.0x (160.0) (6.10) Ex-corporate level options expense. Pro forma for expense reduction program Fair public market value $885.3 $34.81 - ------------------------------------------------------------------------------------------------------------------------------------ * Assuming $200MM Dutch Tender
As stated above, we believe that a meaningful return of capital and commitment to modest cost reductions would send a very positive signal to the market and close at least a portion of the valuation gap. Further, if the market is unwilling to assign the proper value to the company or management is unable to take the necessary actions to close the gap, THE BOARD SHOULD IMMEDIATELY ENGAGE A FINANCIAL ADVISOR TO SELL THE COMPANY IN WHOLE OR IN PART. While we were encouraged by several of the discussion topics at our recent meeting, as the company's largest shareholder, our clear interest (directly aligned with that of other shareholders) is to see value maximized. We believe that your current strategy falls short of this objective and in light of this, we are currently considering our options with respect to nominating an alternative slate of directors at your upcoming annual meeting. We look forward to continued discussion on enhancing value at Infospace and can be reached at 212-603-5700 at your convenience. Sincerely, /S/ Nick Graziano Nick Graziano Managing Director Sandell Asset Management -----END PRIVACY-ENHANCED MESSAGE-----