IPG Unloads Half Of Facebook Stake For $133 Million

Interpublic Group sold about half of its stake in Facebook for $133 million to an undisclosed buyer.

The company had invested less than $5 million in Facebook in June, 2006 for a holding equivalent to less than half a percent of the social network, according to Tom Cunningham, vice president of communications for IPG.

Upon the transaction’s closing, IPG expects to record a pre-tax gain of $132 million. The company is using these proceeds to repurchase its own stock.

Prior to the sale announced today, IPG’s stake had grown to roughly $266 million.

Here’s how the company’s Chairman and Chief Executive Officer, Michael I. Roth, summed up the sale in a press release today:

Interpublic formed a strategic relationship with Facebook in 2006 that allowed us to fast-track the growth of our social media offerings on behalf of clients. Facebook has since become a part of daily life for hundreds of millions of people around the world. Its ubiquity has meant the strategic value of our initial investment has moderated, while the financial value of that stake appreciated significantly. As a result, when an attractive opportunity to divest a portion of our position recently presented itself, we decided that it made sense to do so. Today, we’ve agreed to sell half of our stake for approximately $130 million. Simultaneously, our board has authorized an increase in our share repurchase program by $150 million. We see this as an opportunity to further enhance shareholder value, and reflects our confidence in the long-term prospects for our company.

Meanwhile, the private markets have been valuing Facebook around $87.59 billion for the past couple of months, as the last three auctions of the social network’s shares have all closed at $35 per share on SharesPost.

Readers, do you have any ideas about the identity of the buyer of this chunk of Facebook shares?

Related Stories
Mediabistro Course

Social Media Metrics

Social Media MetricsStarting September 4, work with a social media manager to monitor, measure and optimize your social media efforts! Danielle Brigida will teach you how to sift through web analytics, Facebook Insights, and Twitter mentions to develop a comprehensive reporting and tracking system for your brand. Register now!