PAGE 1 OF 16
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-102)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(A)
(AMENDMENT NO. ___)*
BANKRATE, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
06646V108
(CUSIP Number)
PHILIPPE LAFFONT
COATUE MANAGEMENT, LLC
126 EAST 56TH STREET
NEW YORK, NEW YORK 10022
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
AUGUST 13, 2009
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [X]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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06646V108 Page 2 of 16
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Philippe Laffont
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
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7 SOLE VOTING POWER
NUMBER OF
1,794,426
SHARES -------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY OWNED BY
-0-
EACH REPORTING -------------------------------------------------------
9 SOLE DISPOSITIVE POWER
PERSON
1,794,426
WITH -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,794,426
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
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14 TYPE OF REPORTING PERSON
IN
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coatue Management, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY OWNED BY
1,794,426
EACH REPORTING -------------------------------------------------------
9 SOLE DISPOSITIVE POWER
PERSON
-0-
WITH -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,794,426
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,794,426
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
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14 TYPE OF REPORTING PERSON
CO
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--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coatue Offshore Master Fund, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY OWNED BY
1,658,789
EACH REPORTING -------------------------------------------------------
9 SOLE DISPOSITIVE POWER
PERSON
-0-
WITH -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,658,789
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,658,789
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%
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14 TYPE OF REPORTING PERSON
CO
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ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D ("Schedule 13D") relates to the Common
Stock, par value $.01 per share (the "Common Stock") of Bankrate, Inc., a
Florida corporation (the "Company or the "Issuer"). Philippe Laffont previously
filed a Statement on Schedule 13G as a passive investor on September 14, 2007,
as amended on February 14, 2008, February 9, 2009 and February 17, 2009.
The principal executive offices of the Issuer are located at 11760
U.S. Highway One, Suite 200, North Palm Beach, Florida.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Statement on Schedule 13D is being filed on behalf of
the following persons (each, a "Reporting Person" and
collectively, the "Reporting Persons"):
(i) Coatue Management, LLC, a company formed under the
laws of Delaware ("CM");
(ii) Coatue Offshore Master Fund, Ltd., a company formed
under the laws of the Cayman Islands ("COMF"); and
(iii) Philippe Laffont, the portfolio manager of CM and
COMF.
(b) The principal business address of CM is 126 East 56th Street,
New York, New York 10022. The principal business address of
COMF is 126 East 56th Street, New York, New York 10022. The
principal business address of Mr. Laffont is 126 East 56th
Street, New York, New York 10022. Mr. Laffont is the sole
portfolio manager and managing member of CM and COMF. The
attached Schedule A sets forth the controlling persons, the
executive officers and the directors of CM and COMF and
contains the following information with respect to each such
person: (i) name, (ii) citizenship, and (iii) present
principal occupation or employment and the name, principal
business and address of any corporation or other organization
in which such employment is conducted.
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(c) CM and COMF were formed in order to engage in the acquiring,
holding and disposing of investments in various companies.
Mr. Laffont is the portfolio manager of CM and COMF and is
authorized and empowered to vote and dispose of the
securities held by CM and COMF.
(d) None of the Reporting Persons has, during the last five
years, been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors).
(e) None of the Reporting Persons has, during the last five
years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result
of such proceeding were or are subject to a judgment, decree
or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state
securities laws or finding any violation with respect to such
laws.
(f) CM is a company formed under the laws of Delaware. COMF is a
company formed under the laws of the Cayman Islands. Mr.
Laffont is a French citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The source of funds for the acquisition of the Common Stock was the
general working capital of CM and COMF.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons initially acquired Common Stock of the Issuer
because they believed that the Common Stock represented an attractive
investment. The Reporting Persons initially reported their investment on a
Schedule 13G filed on September 14, 2007 as amended on February 14, 2008,
February 9, 2009 and February 17, 2009. Following the announcement on July 22,
2009 that the Issuer's board of directors (the "Board") approved a definitive
merger agreement whereby the Issuer agreed to be acquired by funds advised by
Apax Partners Inc. (the "Proposed Transaction"), the Reporting Persons
determined to file this Schedule 13D to reserve the right to be in contact with
members of the Issuer's management, members of the Board, shareholders and
other relevant parties regarding the Proposed Transaction and alternatives that
the Issuer could employ to maximize shareholder value. Based on their
evaluation of the Proposed Transaction to date, the Reporting Persons believe
that the Proposed Transaction is not in the best interest of shareholders. As a
result, the Reporting Persons may take positions with respect to potential
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changes in the operations, management, Board composition, ownership, capital
structure, strategy and future plans of the Issuer as a means of enhancing
shareholder value. Such suggestions or positions may include one or more plans
or proposals that relate to or would result in any of the actions required to
be reported herein.
As a result, earlier today Philippe Laffont, on behalf of the
Reporting Persons, sent the following letter to the Issuer's board of
directors:
13 August, 2009
Board of Directors
Bankrate Inc.
11760 US Highway One, Suite 200
North Palm Beach, FL 33408
Ladies and Gentlemen:
Coatue Management beneficially owns over 9% of the outstanding shares
of Bankrate, Inc. (the "Company"), and has been a shareholder for more
than three years. Coatue Management focuses on companies in the global
technology, media and telecom sectors. Our investment process
emphasizes in-depth analysis, including detailed financial models and
proprietary research.
We write to express our extreme disappointment that you have decided
to sell the Company to a group consisting of Company management and
investment funds advised by Apax Partners ("Apax") at a price of
$28.50 per share. We will not tender our shares into the offer. Our
primary concerns are focused on the following:
THE $28.50 OFFER PRICE IS INADEQUATE.
We do not believe that $28.50 per share adequately reflects either the
Company's leadership position in the online consumer finance industry
or its future prospects. During the three-plus years that we have
owned shares of the Company, we have always viewed the Company as an
attractive investment. While the next 12 to 18 months will be
challenging given the weakness in the US economy, we have confidence
that financial services firms will ultimately return to the internet
with increased advertising spend, which will benefit the Company's
bottom line.
In your Recommendation Statement filed with the SEC, you include two
sets of forecasts, one from June 2009 and one from July 2009. For all
the concerns expressed in the Recommendation Statement about the
current environment, forecasted adjusted EBITDA for 2009 is only $2.5
million lower in the later forecast (less than a 5% change). The more
significant change in the second forecast appears in later years, when
the Company's business should be recovering. While both forecast
expect improved results in 2011 and 2012, we question what caused
management to so reduce the Company's growth prospects in a second
forecast presented to the board only five weeks after the first.
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We recognize that 2009 represents a cyclical bottom for the Company.
As a result, we believe that valuations based on 2011 and 2012
expectations are much more appropriate than those based on 2009
results. While the $28.50 price can be justified based on the
bottom-of-cycle 2009 forecasted results, when compared to more
normalized 2011 and 2012 forecasted results, the offer is clearly
inadequate. Based on the Company's own July forecast, while the ratio
of enterprise value to 2009 adjusted EBITDA is 11x, the ratio of
enterprise value to 2012 adjusted EBITDA is only 5x. We believe that
emphasizing valuation metrics based on 2009 and 2010 leads to a
significant undervaluation of the Company.
You claim that you were concerned about what the market's reaction to
the Company's second quarter results would be, but by announcing the
merger at the same time, you never allowed to the market to react to
the second quarter and therefore never tested how the Company's
current results affect the market's view of the Company's longer-term
prospects.
We also note that for all the concern over the current poor state of
the economy, the Company's common stock traded above $30.00 per share
as recently as May.
MANAGEMENT HAS NEGOTIATED A PRICE IN ITS FAVOR, IN THE FACE OF A
NUMBER OF CONFLICTS OF INTEREST.
While the Company claims that recent weakness in its business
justifies a lower deal price, management clearly shares our confidence
in the Company's prospects. If the Company's current quarter
performance is a harbinger of a long-term decline in the performance
and value of the Company (and a rationale for a lower deal price) then
why is management participating in the transaction as buyers? The
Recommendation Statement indicates that following the transaction,
management will own between 6-10% of the Company. In addition,
management will be entitled to participate in a $120 million
compensation pool (20% of the value placed on the Company by the
current offer) if Apax's return is four times its investment, and even
more if the Company does better.
We believe that the negotiation process was seriously flawed because,
as stated in the Recommendation Statement, the board did not give the
disinterested directors primary responsibility for negotiating the
transaction. The board ceded this responsibility to management, who
was in effect negotiating with their future employer.
THE DEAL IS STRUCTURED TO DISCOURAGE COMPETING BIDS.
The $30 million breakup fee represents more than $1.50 per share and
more than 5% of the offer price, which is clearly excessive and not
consistent with normal market practice. While you emphasizes that in
return for accepting a lower price, the Company received concessions
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06646V108 Page 9 of 16
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that reduced the deal's uncertainty, we question who really benefited
as protections like an accelerated tender offer schedule only help
Apax and management reduce the possibility that competing offers will
emerge.
In short, we believe that the sale of the Company to Apax and
management is grossly unfair to existing shareholders because it
significantly underestimates the true long-term value of the Company.
We also question the integrity of the process in light of numerous
conflicts of interest. As noted in the Schedule 13D that we are filing
today with the Securities and Exchange Commission, we intend to oppose
the transaction and to be in contact with other like-minded
shareholders.
Sincerely,
Philippe Laffont
Except as described in this Schedule, the Reporting Persons have no
present plans or proposals that relate to or would result in any of the actions
required to be reported herein. However, each Reporting Person expects to
evaluate on an ongoing basis the Issuer's financial condition and prospects and
its interest in, and intentions with respect to, the Issuer.
Accordingly, each Reporting Person reserves the right to change its
intentions and develop plans or proposals at any time, as it deems appropriate.
In particular, each Reporting Person may at any time and from time to time, in
privately negotiated transactions or otherwise, acquire additional securities
of the Issuer, including additional Common Stock; dispose of all or a portion
of the securities of the Issuer, including the Common Stock, that the Reporting
Persons now own or may hereafter acquire; and/or enter into derivative
transactions with institutional counterparties with respect to the Issuer's
securities. In addition, the Reporting Persons may engage in discussions with
management, members of the Board, shareholders and other relevant parties
concerning the operations, management, Board composition, ownership, capital
structure, strategy and future plans of the Issuer, including the Proposed
Transaction.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
All ownership percentages set forth herein assume that there are
18,885,504 shares of Common Stock outstanding, representing the total number of
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06646V108 Page 10 of 16
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outstanding shares of Common Stock reported in the Quarterly Report of the
Issuer filed on Form 10-Q with the Securities and Exchange Commission (the
"SEC") on August 10, 2009.
(a) and (b)(i) COMF may be deemed to beneficially own 1,658,789 shares
of Common Stock, approximately 8.8% of the total number of shares of Common
Stock outstanding. COMF may be deemed to have shared voting and dispositive
power over 1,658,789 of the shares of Common Stock it beneficially owns.
(ii) By virtue of the fact that CM is the investment manager to COMF
and other managed accounts and is authorized to vote and dispose of the
securities held by COMF and such other accounts, CM may be deemed to
beneficially own 1,794,426 shares of Common Stock, approximately 9.5% of the
total number of shares of Common Stock outstanding. CM may be deemed to have
shared voting and dispositive power over 1,794,426 of the shares of Common
Stock it beneficially owns.
(iii) By virtue of the fact that Mr. Laffont is the portfolio manager
of CM and COMF and is authorized and empowered to vote and dispose of the
securities held by CM and COMF, Mr. Laffont may be deemed to beneficially own
1,794,426 shares of Common Stock, approximately 9.5% of the total number of
shares of Common Stock outstanding. Mr. Laffont may be deemed to have sole
voting and dispositive power over 1,794,426 of the shares of Common Stock he
beneficially owns.
(c) Except as set forth in this Schedule B, to the best of the
knowledge of each of the Reporting Persons, none of the persons named in
response to paragraph (a) has effected any transactions in the Common Stock
during the past sixty days.
(d) Each of the Reporting Persons affirms that no person other than
such Reporting Person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the Common Stock
owned by such Reporting Person.
(e) Not applicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following exhibits have been filed with this Schedule 13D.
Exhibit 1 Joint Filing Agreement.
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Date: August 13, 2009
COATUE MANAGEMENT, LLC
By: /s/ Philippe Laffont
---------------------------
Name: Philippe Laffont
Title: Managing Member
COATUE OFFSHORE MASTER FUND, LTD.
By: /s/ Philippe Laffont
---------------------------
Name: Philippe Laffont
Title: Managing Member
PHILIPPE LAFFONT
/s/ Philippe Laffont
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INDEX TO EXHIBITS
EXHIBITS
Exhibit 1 Joint Filing Agreement.
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SCHEDULE A
COATUE MANAGEMENT, LLC
Philippe Laffont
France
Director/Portfolio Manager
126 East 56th Street
17th floor
New York, NY 10022
COATUE OFFSHORE MASTER FUND, LTD.
Christopher Bowring
United Kingdom
Director
International Management Service
Harbour Centre 4th floor
P.O. Box 61
Grand Cayman KY1-1102
Cayman Islands
Martin Lang
United Kingdom
Director
International Management Service
Harbour Centre 4th floor
P.O. Box 61
Grand Cayman KY1-1102
Cayman Islands
Philippe Laffont
France
Director/Portfolio Manager
126 East 56th Street
17th floor
New York, NY 10022
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SCHEDULE B
TRANSACTIONS IN THE COMMON STOCK ($0.01 PAR VALUE PER SHARE)
OF BANKRATE, INC. DURING THE PAST 60 DAYS
(ALL TRANSACTIONS WERE MADE IN THE OPEN MARKET UNLESS OTHERWISE INDICATED)
TRANSACTION NUMBER OF SHARES
DATE CONDUCTED BY PURCHASED PRICE PER SHARE
7/22/09 COMF 46,192 $28.40
7/22/09 COMF 207,860 $28.87
7/22/09 COMF 230,955 $28.90
7/22/09 CM 50,000 $28.40
7/22/09 CM 225,000 $28.87
7/22/09 CM 250,000 $28.90
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EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of this Schedule 13D. This Joint Filing Agreement shall
be included as an Exhibit to such joint filing. In evidence thereof, each of
the undersigned, being duly authorized, hereby executed this Agreement.
Date: August 13, 2009
COATUE MANAGEMENT, LLC
By: /s/ Philippe Laffont
---------------------------
Name: Philippe Laffont
Title: Managing Member
COATUE OFFSHORE MASTER FUND, LTD.
By: /s/ Philippe Laffont
---------------------------
Name: Philippe Laffont
Title: Managing Member
PHILIPPE LAFFONT
/s/ Philippe Laffont
--------------------------------