On March 1, 2015, Freescale and NXP announced that they had entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) under which NXP will acquire all outstanding common shares of Freescale (the “Proposed Buyout” or “Merger”). Pursuant to the Merger Agreement, Freescale shareholders will receive $6.25 in cash, without interest, and 0.3521 of NXP’s ordinary shares (the “Merger Consideration”), for each share of the Company’s common stock they own. The total implied per share consideration is $36.14. The Proposed Buyout is valued at approximately $11.8 billion resulting in a combined enterprise value of over $40 billion, and is expected to close in the second half of 2015.
According to the Complaint, the Proposed Buyout is the culmination of the effort of a group of private equity investors that collectively own approximately 64% of the Freescale’s common shares, whose representatives control the Freescale Board of Directors. These investors, referred to in Freescale’s SEC filings as the “Sponsors,” have entered into a Support Agreement agreeing to vote in favor of the Proposed Buyout ensuring the Merger is completed.
On April 2, 2015, Freescale and NXP filed a joint preliminary Proxy Statement/Prospectus on Form F-4 Registration Statement (“Form F-4”) with the SEC that provides a brief overview of the Sponsors’ efforts. The Complaint alleges that the Form F-4 fails to make all material disclosures and contains materially misleading statements about the Proposed Buyout.
The Complaint further alleges that the Individual Defendants have failed to act in good faith and have intentionally
failed to fully disclose to Plaintiff and the Class all material information necessary to cast an informed shareholder vote on the Proposed Buyout, and that NXP, Freescale LP, and Nimble (collectively “The Entities”) have acted and are acting with knowledge of, or with reckless disregard to, the fact that the Individual Defendants are in breach of their fiduciary duties to Freescale’s public shareholders, and have participated in such breaches of fiduciary duties.
This case was voluntarily dismissed on July 14, 2015.