According to the complaint filed November 23, 2010, pursuant to the Merger Agreement, each share of ActivIdentity common stock will be exchanged for $3.25 in cash representing a total transaction value of approximately $162 million. Following completion of the exchange offer, Merger Sub will merge into ActivIdentity and the ActivIdentity shares not acquired in the exchange offer will convert into the right to receive the same consideration as paid in the exchange offer (the "Proposed Acquisition").
The consideration to be paid to the class members is unconscionable, unfair and grossly inadequate because, among other things: (a) the intrinsic value of the stock of ActivIdentity is materially in excess of $3.25 per share, giving due consideration to the possibilities, of growth and profitability of ActivIdentity in light of its business, earnings and earnings power present and future; (b) the $3.25 per share price is inadequate and offers an inadequate premium to the public stockholders of ActivIdentity; and (c) the $3.25 per share price is not the result of arm's length negotiations but was fixed arbitrarily to "cap" the market price of ActivIdentity, as part of Plan for Assa Abloy to obtain complete ownership of ActivIdentity assets and business at the lowest possible price. Defendants' action in proceeding with the Proposed Acquisition is wrongful, unfair and harmful to ActivIdentity's public stockholders, and will deny them their right to share proportionately in the true value of ActivIdentity' future growth in profits and earnings.
A similar class action complaint was also filed in the U.S. District Court for the District of Delaware.
According to the Company's Form 10-K for the fiscal year ended September 30, 2010, beginning on October 12, 2010, several putative class action lawsuits were filed purportedly on behalf of ActivIdentity's stockholders in the Superior Court of Alameda County, California, the Delaware Chancery Court, the United States District Court for Northern California and the United States District Court in Delaware. The complaints name ActivIdentity and each member of the ActivIdentity Board as defendants. The lawsuits allege a variety of claims, including that our board members breached fiduciary duties owed to ActivIdentity stockholders by failing to engage in a fair process and failing to maximize stockholder value in approving the Merger. Several of the complaints also allege that ActivIdentity aided and abetted the members of the ActivIdentity Board in the alleged breach of their fiduciary duties. The Plaintiffs seek relief that includes, among other things, an injunction prohibiting the consummation of the Merger, rescission—to the extent the Merger terms have already been implemented, and the payment of plaintiffs' attorneys' fees and costs. On December 9, 2010, ActivIdentity and the defendants in a number of the actions entered into a memorandum of understanding which provides for the settlement and dismissal with prejudice of such actions, subject to customary conditions, including completion of appropriate settlement documentation, consummation of the merger and all necessary court approvals.
On March 2, 2011, the plaintiff filed a notice voluntarily dismissing the action without prejudice.