More funds reject AOL bid for Tradedoubler

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STOCKHOLM - Two more Swedish funds on Tuesday rejected AOL's bid for Internet ad group Tradedoubler piling pressure on the Time Warner unit for an extended bid deadline and, possibly, a higher offer.

AFA Insurance, Tradedoubler's third-largest shareholder at 4.8%, said it had no intention at the moment to tender its shares to AOL, which has offered 215 crowns a share. The offer deadline, extended once already, expires on March 14.

"As it looks now, we will keep our shares," AFA Insurance share chief Anders Algotsson said. Tradedoubler stock was trading at 216.50 crowns by 1253 GMT, unchanged on the day.

Sweden's Handelsbanken asset management said its funds and those of life unit SPP, with 3.3% of Tradedoubler stock, would also not accept the offer.

"We thought from the beginning that the bid was cheap and that there ought to be grounds for a better bid," said Bo Selling at Handelsbanken asset management.

"Alternatively, we want to see the firm keep developing (on its own)," he added. The Handelsbanken and SPP stakes together make them eighth-largest shareholder in Tradedoubler. Other key shareholders Alecta and AMF Pension last week, which together have 13%, told Reuters they rejected the offer.

Analysts said there was room for a higher offer, though they thought AOL would initially extend the bid deadline again.

"Given that there is an industrial logic between the two companies, they complement each other well, it should be in AOL's interest to get the deal through and raise the bid," said Christian Lee at independent analyst firm Redeye.

"I think AOL will raise its bid, but the question is whether it will be enough that large institutional shareholders will think it is an attractive offer," he said. "An extension to the deadline is probably what will happen tomorrow."

Another analyst agreed.

"It is hard to say what AOL will do, but we think that they can pay more. It is a difficult situation, it is AOL who decides and what will happen depends on how much they want this takeover. Probably, they want it quite a lot," the analyst added.

He said shareholders could want as much as 220 or 230 crowns for their Tradedoubler shares, though AOL was unlikely to raise its offer so much.

"They will probably extend the deadline again," he said.

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