Harman Shareholders File Class Action Suit Against Merger With Samsung
Jan 17, 2017 10:02 AM EST
US auto parts maker Harman is facing a lawsuit filed by its own shareholders who opposed the company's $8 billion merger with Korean tech giant Samsung Electronics.
The lawsuit was filed in a court in Delaware, against Harman CEO Dinesh Paliwal and the board by shareholders of Harman, claiming that the company did not act in good faith processing the deal with Samsung, reported Ubergizmo.
Led by Robert Pine, the shareholders said that Harman put the value of the company too low and agreed to the unfavourable which causing damages to them.
Harman shareholders also stated their objection to the terms and conditions of the contract, where the company agreed to not consider other potential bidders except Samsung.
Last December, Atlantic Investment Management - who owns a 2.3 percent stake in Harman announced that it would vote against the deal since the buying price was just too low.
The $8 billion acquisition of the company was announced by Samsung last November. The acquisition holds the record as the biggest one so far for the Korean tech company.
The said deal includes allowing Samsung to become a tier-1 component supplier in the automobile market, as well as supplying its semiconductors and displays together for connected cars.
Samsung agreed on $112 per share, 28 percent higher than the price on November 13, and 37 percent higher than the average the month before.
If there will be 50% shareholders of Harman who would agree in the shareholders meeting which is expected in the first quarter this year, the deal will go through.
According to PulseNews Korea, some say Samsung's top management will have to meet with Harman shareholders to justify the deal, but Samsung heir Lee Jay. Y has been banned from overseas travel in connection with prosecutors' investigations implicating him as a suspect for a bribery charge related to the July 2015 merger of two Samsung affiliates.