US satcoms components maker Anaren has proposed a settlement deal for court approval following legal complaints over its sale to private equity firm Veritas Capital.
The group initially faced two lawsuits from purported shareholders before they were…
US satcoms components maker Anaren has proposed a settlement deal for court approval following legal complaints over its sale to private equity firm Veritas Capital.
The group initially faced two lawsuits from purported shareholders before they were consolidated into one action.
The first, filed in November, claims its directors breached their fiduciary duties to shareholders by agreeing to an allegedly inadequate merger consideration, as well as provisions that purportedly precluded competing offers to acquire the group.
The second suit was filed a month later and alleges that the preliminary proxy statement on the deal lacks purportedly material information. It also asserts that the directors caused Anaren to enter into the merger agreement following an allegedly unfair and inadequate process, and for an inadequate merger consideration.
Both class action lawsuits seek a court order to preliminarily enjoin consummation of the merger agreement, which outlines the sale of Anaren for around US$381m in cash.
As part of the settlement deal, reached on 28 January 2014 and secured without the company agreeing or admitting that any of the claims have merit, certain supplemental and amended disclosures to the definitive proxy statement have been issued.
The additional disclosures reveal Houlihan Lokey was brought on as a financial adviser with Moelis last year “in connection with a potential transaction, ultimately not pursued by the company, involving the acquisition of a company, Party D, that was advised by Moelis in the transaction”.
It also included an extended revenue forecast detailing the possible impact of an incoming subcontract from US aerospace and defence contractor Raytheon, which had not been awarded to the company at the time but would represent the largest programme in its history.
The sale of Anaren for US$28 per share is a 12.4% premium over the closing price of the company’s shares on 1 November 2013, the last day of trading prior to the announcement.
The deal came after a US$23 per share offer from PE firm Vintage Capital, Anaren’s largest shareholder with around 13% last year, was rejected by the company.
That offer came in April, hot on the heels of another shareholder, PE firm Discovery Group with a 6% stake, criticising Anaren’s board for not engaging with the “multiple parties” it said were interested in buying it.
Anaren said its settlement deal will not affect the consideration to be received by the company’s shareholders in the Veritas deal.
