(Updates with excerpt from complaint in third paragraph.)
Sept. 21 (Bloomberg) -- NetLogic Microsystems Inc., the designer of data-network processors being bought by chipmaker Broadcom Corp. for about $3.7 billion, was sued by a shareholder who contends the deal undervalues the stock.
NetLogic directors shirked their duty to get the best possible price for the stock by agreeing to take $50 a share, investor Vincent A. Danielo said in a complaint made public today in Delaware Chancery Court in Wilmington.
“The proposed transaction is the product of a flawed process that resulted from the board’s failure to maximize shareholder value,” Danielo said.
Broadcom, based in Irvine, California, and Santa Clara, California-based NetLogic announced the agreement in a Sept. 12 statement, saying the combination will help provide new product lines and reduce delivery times.
Michael Tate, NetLogic’s chief financial officer, didn’t immediately return voice and e-mail messages seeking comment on the lawsuit.
NetLogic rose 25 cents to $48.35 at 10:36 a.m. New York time in Nasdaq Stock Market trading.
The case is Danielo v. NetLogic, CA6881, Delaware Chancery Court (Wilmington).
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