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American Greetings revalues initial investment in Egreetings Network
AmericanGreetings.com will acquire all remaining outstanding common shares of Egreetings Network for $0.85 a share
American Greetings Corp.`s Internet unit has signed a definitive merger agreement in which AmericanGreetings.com would acquire all remaining outstanding common shares of Egreetings Network for $0.85 a share. The company acquired approximately 20% of the Egreetings shares during its March 2000 acquisition of Gibson Greetings.
The combined businesses will attract nearly 20 million unique visitors per month, placing AmericanGreetings.com among the top 15 web sites.
At the same time, American Greetings will revise the value of its initial investment in Egreetings Network Inc., and take a non-cash charge of approximately $33 million.
American Greetings will include the charge as an investment loss in its fiscal 2001 fourth quarter and full year earnings, which reflects a decline in the value of an investment. The charge will impact the company`s fiscal 2001 fourth quarter and full year earnings by approximately $0.51 a share. American Greetings now anticipates earnings for the full year to be in the range of $0.79 to $0.84 a share.
"While the charge will affect this year`s earnings, the merger with Egreetings will establish AmericanGreetings.com as the category leader in electronic greetings," said Morry Weiss, chairman and chief executive officer of American Greetings Corp. "We are now more confident than ever that this business unit will move quickly towards profitability by the fourth quarter in calendar year 2001."