Swedish pension group Alecta, which owns 10.01% of TradeDoubler, rejected the bid, saying AOL had undervalued the company. Other investors have also said they would need an incentive to approve the deal, which would improve the company's advertising capabilities in Europe.
The cash deal is the first major deal new AOL chief executive Randy Falco has made. Falco was hired by AOL from NBC Universal in November to help turn the ailing business around. AOL has offered or 8.6% more than TradeDoubler's closing price Friday and TradeDoubler's board has unanimously recommends the offer and shareholders. So far about 20% percent of the company have agreed to accept it, AOL said.
Falco said: "This investment provides a unique opportunity for both TradeDoubler and [AOL] to capitalise on the continued rapid growth in online advertising and e-commerce in Europe. We believe that TradeDoubler will be complementary with our other businesses, especially with our third-party advertising network - Advertising.com.
"We look forward to working with the great people at TradeDoubler to offer European online marketers the broadest range of advertising solutions and websites the most comprehensive set of monetisation opportunities."
AOL has sold its European internet businesses as the company shifted direction from a subscription-led model to an advertising-led business in order to compete with the likes of Google and Yahoo.
The company, the internet unit of Time Warner, offered $900m (£458m) for TradeDoubler in a bid to increase its European internet offering.
The Stockholm-based company was founded in 1999 and boasts 334 employees and sales of $151m in 2005.
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