Benzinga | Jul 19, 2021 03:46PM EDT

MDC Partners Shareholder, Stagwell Media, Comments On Deal With Co., Stagwell: Encourages Vote In Favor Of Proposed Deal

Dear MDC Shareholders:

As a Partner of The Stagwell Group, I am writing to encourage you to vote in favor of the Proposed Transaction. We have been working diligently to earn your support and I believe the combination will create a diverse, resilient, and scaled company that can compete with the largest industry participants and create significant value for all stakeholders.

Recent news articles and events provide additional support to this thesis for several reasons.

First, clearly, the market today is showing concern about the potential return of COVID-19 given the rise in cases with the new Delta variant. The surge in advertising has already started to slow ( https://bit.ly/3eB9sXL) and new uncertainty around COVID-19 is unlikely to be helpful to the classic advertising and marketing industry. We believe a larger, more stable and refinanced company will obviously be better positioned against any new potential COVID-19 risk.

Second, at the same time, analysts are predicting ( https://on.wsj.com/3kDAd1x) this upcoming election season will be as big as the last presidential race and will likely match the $9 billion spent in the 2019-20 election cycle. Such spending has proven to be unaffected by the economic cycle so far and this continued growth in online political activity is another reason these companies are better together, given Stagwell's profile in this area.

These events and trends provide further evidence that the combination -- which also provides MDC a better balance sheet, $30 million in synergies, greater growth rate, greater scale, lower leverage, and higher concentrations of high-growth digital services -- is in the best interests of MDC shareholders.

Third, on Friday, the independent proxy advisory firm ISS, in recognition of the benefits of the combination and the changes Stagwell has agreed to on both economics and governance, recommended to its clients they vote FOR the combination noting:

"... [MDC] shareholders will be better off as 31 percent shareholders of the combined company than they would be as 100 percent shareholders of standalone MDC."*

Fourth, Stagwell also announced on Thursday its intention to recommend a representative of a large MDC public shareholder for the Board of the combined company. We believe this public shareholder representation will help ensure the new combined company faithfully serves the interests of all shareholders.

Your electronic vote is due by 11 AM on Thursday, July 22, 2021 unless you plan to attend the meeting on July 26.

The current events playing out in the marketplace, in addition to the ISS recommendation, provide new and important reasons for MDC shareholders to support this deal.

I ask you to vote for the transaction.

Sincerely,

Jay Leveton

Partner, The Stagwell Group