Jumping the Gun at Intrado

A while back, I wrote about the planned purchase of Intrado by West Corp, an action that was pressured by Roy Disney and his gang of shareholder bullies at the Shamrock Fund, in order to make a short-term profit for themselves, but at the expense of long-term Intrado investors. The shareholders of Intrado will vote next week on whether to approve the merger. I've already filed my proxy against the acquisition.

Last week, in anticipation of the merger, Intrado fired 60 employees, including some high-level executives. This was done in order to take advantage of expected operational efficiencies from the combination with West.

Excuse me. The shareholders have not even approved the deal yet. I know, slim chance of something like this getting denied, but it could happen. In which case, the operational efficiencies may turn into a lean and meaningless company. Couldn't they have waited a few days just to make sure?

There is another issue, and this one is potentially more serious. The U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) have very strict rules about ways in which separate companies can collaborate, especially if they are competitors in any way. This is especially an issue if the two companies are in the process of merging. Over the past several years, the FTC and DOJ have brought a number of cases against companies for premature coordination (called gun jumping) from an antitrust point of view. The Sherman Act specifies that coordination of competitive activities is unlawful. If there was any collaboration between the two companies on the decision, West Corp could be in court over this issue soon.

As quoted in RCR Wireless News, David Whitten, Intrado's Sr. VP of Corporate Development and Strategy, said the layoffs "were the result of a detailed assessment of Intrado's staffing needs in the West structure." It sounds to me like there have likely been conversations among the management of the two companies concerning the current structures and costs, and the structures and costs of the combined entities. This sounds like coordination of activities to me.

Personally, I have no insight into how this decision was made, or who had input. However, as an Intrado shareholder (for a few more days), I am very concerned that management is working toward this merger completely openly and within the law.