According to the complaint filed on September 6, 2011, the Company violated federal securities laws in connection with a proposed merger.
On August 4, 2011, the Company announced that the Board had entered into a Proposed Acquisition to sell the Company for, what the Plaintiffs allege was, inadequate cash consideration of $19 per share.
Although he Company represented that the price equated to a one-day premium to the Company’s stock price, the Plaintiff states the Proposed Consideration failed to take into consideration certain factors, including: (i) the Company's target price or valuation set by analysts above the $19 per share consideration; and (ii) premiums in comparable deals that average more than two and a half times the premium presented by the $19 per share consideration.
The complaint further alleges that the Board breached its fiduciary duties by agreeing to preclusive deal protection devices in connection with the Agreement and Plan of Merger the Company entered into on August 3, 2011. These provisions include: (i) a no-solicitation provision prohibiting the Company from properly shopping itself; (ii) a termination fee payable by the Company for $65 million if the Company were to accept a competing bid; and (iii) a five-day matching rights period. Moreover, the Plaintiffs assert that the Proposed Acquisition is a fait accompli due to Voting Agreements executed by two of the defendants. The Voting Agreements secure 72 percent of the Company’s voting shares in favor of the Proposed Acquisition.
Lastly, on August 22, 2011, the Company filed with the SEC the Proxy, soliciting the vote of shareholders in favor of the Proposed Acquisition. The Proxy allegedly contained numerous materially misleading statements or omissions concerning: (i) the process by which the Board determined to sell the Company; and (ii) the financial projections and assumptions underlying the financial advisors' analyses.
On October 20, 2011, the court issued an order dismissing the class action without prejudice pursuant to the plaintiff's notice of voluntary dismissal.