Photo: Flickr / LeWEB11
Facebook is trying to speed along its acquisition of Instagram.It’s using a California law that lets it issue shares without requiring SEC approval, the Financial Times reports.
This isn’t sneaky; it’s smart.
A hearing with California’s Department of Corporations is scheduled for August 29. If approved, Facebook could issue the shares the next day.
Instagram’s 19 shareholders will have a chance to protest the deal, according to Mark Leyes, a spokesperson for the California department.
In April, Facebook agreed to buy Instagram for $300 million in cash and just under 23 million shares. At the time, that was worth $1 billion. At the IPO price, Instagram became worth $1.2 billion. Now, the deal is valued at $787 million.
Leyes said the fairness hearing was “limited in scope” and that the hearing was not the only step the companies needed to take. Regulators are still investigating it.
Jeffrey Klurfeld, the FTC’s Western Region Director, declined to comment on Facebook and Instagram, citing the agency’s policy of not commenting on any investigations.
A Facebook representative said the company had no comment beyond its public filings.