Securities

BroadSoft and Cisco have entered into a merger agreement, but according to the complaint, the offered compensation is too low and the Proxy Statement filed with the SEC does not contain enough information to allow shareholders to fully evaluate the deal. The complaint claims that the Proxy omits information in three areas: (1) key components and other figures for analyses, (2) potential conflicts of interest for the officers and directors, and (3) the details of confidentiality agreements with other companies prior to the merger agreement.

Omega Healthcare Investors, Inc. is a real estate investment trust investing in healthcare facilities in the US and UK. The complaint for this class action claims that the company did not disclose problems with certain facilities, including two of its top-ten operators, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

Meridian Bioscience, Inc. announced its acquisition of Magellan Biosciences, Inc. and its subsidiary Magellan Diagnostics, Inc. by touting their lead testing system, but the complaint for this class action alleges that Meridian knew that the system produced inaccurate results. When the FDA issued a warning to this effect, the complaint claims, Meridian’s stock price dropped abruptly.

Endo International plc develops pharmaceutical products and generic drugs, so its acquisition of Par Pharmaceutical Holdings, Inc., a maker of generic drugs, must have seemed like a profitable move. But the complaint claims Endo concealed information then and over the next many months: that Par had colluded to fix generic drug prices, that the “double-digit growth” the company expected was to come in part from Par’s illegal price-fixing, and that new CEO Campanelli’s “impressive track record” was due in part to that illegal activity. The complaint alleges that the company’s revenues were therefore unsustainable and its public statements false and misleading.

Cheetah Mobile offers “global content promotional channels,” and a live video streaming application called Live.me which has a gifting system through which broadcasters can earn money from users. The figures it reported in the 2016 20-F and second quarter press release were impressive. However, the complaint alleges that the figures and positive outlook were false and misleading, because a research group subsequently reported that 55% of the company’s second-quarter consolidated revenue “does not exist” and because the company was using fake accounts to pretend that users of Live.me were rewarding other users.

Ruby Tuesday has entered into a merger agreement that would have NRD Capital paying stockholders $2.40 a share. The complaint for this class action alleges that Ruby Tuesday’s Proxy Statement violates Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 in several ways, but it’s the account of the process that makes this deal a head-scratcher. In the course of negotiation with other bidders, Ruby Tuesday received superior offers from other companies, and the complaint asks why the company did not accept them, when parts of its own Proxy Statement appear to assess its shares at a higher value.

The Omega Protein Corporation announced a proposed merger transaction with Cooke, Inc. on October 6, 2017, under which Cooke would pay $22 per share of Omega stock. But the complaint for this class action claims that the Preliminary Proxy Statement Omega has submitted to the Securities and Exchange Commission (SEC) doesn’t contain enough information to allow shareholders to fairly assess the transaction. The complaint claims that insufficient information is given in three areas, (1) the figures and assumptions used in arriving at various projections and opinions contained in the Proxy, (2) the other deals that were considered before Omega decided on the proposed transaction, and (3) the potential conflicts of interest of the officers of the company.

Ubiquiti Networks, Inc. seemed to have an interesting idea in the four-million-participant “Ubiquiti Community” it claimed to have in place of a conventional sales force. But according to the complaint for this class action, on September 18, 2017, Citron Research issued a report which accused the company of “corporate fraud” and deceit, in both its statements about the size of the Ubiquiti Community and about its account receivables. The complaint claims that the company has violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, among other laws.

Landauer, Inc. has signed an agreement for its merger with Fortive Corporation via a tender offer from Fortive of $67.25 cash per share. In connection with the proposed transaction, Landauer filed a Solicitation/Recommendation Statement with the Securities and Exchange Commission (SEC) that the complaint alleges violates Sections 14(e), 14(d), and 20(a) of the Securities Exchange Act of 1934 by omitting material information in two categories. First, according to the complaint, it omits information used by the company’s financial advisor, Lazard Freres & Co. LLC. Second, the complaint alleges that the Statement does not disclose conflicts of interest on the part of Lazard.

Avista Corporation and Hydro One Limited are both regulated electricity and natural gas companies, and if the merger just proposed goes through, they will together become one of the largest regulated utilities in North America, serving Ontario, Washington, Oregon, Idaho, Montana, and Alaska. But the complaint for this class action claims that shareholders are not being given enough information to assess the deal. The complaint alleges the Proxy does not provide enough information about key inputs and assumptions underlying analyses.  Further, where non-GAAP measures are used, the Proxy does not provide comparable GAAP measures or the line-item metrics used to calculate them.