Updated: The Miva board has rejected this bid, “following careful review and consideration”, the company said in a statement. The board said that it “believes that blinkx’s proposal significantly undervalues Miva’s assets, including our technology, brand recognition and network…We don’t believe that the proposal, as currently constituted, is in the best interests of our shareholders. The Board of Directors continues to evaluate all of MIVA’s strategic options in the context of our industry and the broader business environment and remains committed to evaluating and considering offers that maximize shareholder value.”

SEE ALSO: Earnings: Blinkx Losses Down, Revenue Down; Hits Expectations

Original post, Aug 8: Video search index Blinkx wants to buy pay-per-click ad network MIVA, formerly FindWhat, for million. The London- and San Francisco-based firm has offered $1.20 per share, valuing Miva at $41.13 million, a 54 percent premium on yesterday’s $0.78 close and funded by cash from both companies. Blinkx reckons the acquisition would allow it to more quickly roll out the technologies it’s developed over the last year - probably most notably, its own video advertising proposition, AdHoc. Blinkx launched AdHoc in June 2007 but it seems Miva can offer Blinkx greater distribution. It does PPC on both a vanilla basis and its Precision Network caters to vertical publishing segments.

In Blinkx’s letter to the Miva board, the company says Miva faces “several challenges” including new technology costs, “deteriorating cash position”, deterioration of its Media EU business and “continued decline in revenue and profitability”. Blinkx says its matching technology “will enable immediate platform improvements for MIVA”, will bring it higher CPMs and can add to its toolbar product. The pair partnered back in 2005, when Blinkx served Miva ads on to its SmartAds platform. Miva income fell 4.6 percent year-on-year in Q1 while losses improved at $5.1 million (GAAP).

The timing is interesting. Miva president and CMO Seb Bishop left the business this week after eight years, with CEO Peter Corrao now also assuming Bishop’s president role. Its Q2 earnings come on Monday. Miva has offices in the US, UK, Germany, Italy, France and Spain.