Company rebuffs offer for its new top level domain business.
Rightside (NASDAQ:NAME) has turned down Donuts’ unsolicited offer to buy its top level domain name operations for $70 million.
The offer was for all 40 of Rightside’s top level domains, such as .ninja and .rocks, and probably also included Rightside’s backend registry operations.
Rightside CEO Taryn Naidu said, “We believe Donuts’ proposal is an opportunistic attempt to acquire Rightside’s valuable portfolio of domain extensions with an undervalued price and in a manner that would not be in the best interests of Rightside shareholders.”
I outlined the case against accepting the offer in this week’s podcast, which I recorded before today’s news.
Rightside believes its future growth will come from new TLDs, and hopes for new TLD revenue of $50 million to $75 million a year in the not-too-distant future. The only reason I could see it accepting an offer to sell its new top level domain business is if it had a separate offer for the other part of its business.
When I asked Donuts CEO Paul Stahura in May when we could expect TLD industry consolidation, he said “When prices become more sane.”
Apparently, he believes $70 million is sane for Rightside, but Rightside doesn’t think so.