According to a complaint filed on November 11, 2011, the plaintiffs allege violations of the federal securities laws arising out of a proposed merger.
On October 17, 2011, the Company and Bidder jointly announced that they had entered into a definitive merger agreement on October 16, 2011 under which Bidder will acquire the stock of the Company for approximately $230. Under the terms of the transaction, the Company’s shareholders will receive $3.70 per share in cash for each share of common stock. The transaction is expected to close as soon as the fourth quarter of 2011. Certain insiders at the Company beneficially owning approximately 7.9% of the shares have already agreed to tender their shares and support the Proposed Transaction.
Allegedly, in facilitating the acquisition of the Company by the Bidder for grossly inadequate consideration and through a flawed process, each of the Defendants breached and/or aided the other defendants’ breaches of their fiduciary duties. The plaintiffs state that, according to Yahoo! Finance, at least one analyst recently set a high price target of $4.00 per share of the Company common stock.
In addition, the plaintiffs claim that by making misleading statements and material omissions in the Company’s Schedule 14D-9 Solicitation/Recommendation Statement dated October 25, 2011, Defendants violated Sections 14(d)(4), 14(e), and 20(a) of the Exchange Act. For example, the plaintiffs assert that the 14D-9 omits and/or misrepresents material information concerning, among other things: (a) the sales process for the Company; (b) the data and inputs underlying the financial valuation exercises that purport to support the so-called “fairness opinion” provided by the Company’s financial advisor; and (c) details concerning the financial advisor’s potential conflict of interest, including the amount of compensation received for services it has provided to the Bidder. These omissions and misstatements, according to the plaintiffs, constitute both a breach of the defendants’ fiduciary duties to shareholders, as well as a violation of Sections 14(d)(4), 14(e), and 20(a) of the Exchange Act.
On August 27, 2012, this case was dismissed without prejudice for want of prosecution.