Bloomberg News

Blue Coat Systems Sued by Investor Over Thoma Bravo Buyout

December 14, 2011

(Updates with excerpt from complaint in third paragraph.)

Dec. 13 (Bloomberg) -- Blue Coat Systems Inc., a provider of Internet-security software, was sued by an investor who contends the stock is undervalued in a planned $1.3 billion buyout by a group headed by Thoma Bravo LLC.

Directors of the Sunnyvale, California-based company have a duty to get the best possible price for the stock, and negotiated an inadequate premium in the $25.81-a-share deal, lawyers for Robert N. McLain said in a Delaware Chancery Court complaint made public today in Wilmington.

The agreement offers Blue Coat shareholders a premium “of only 14 percent over its average daily trading price for the preceding year,” according to the complaint. The stock rose 5 cents to $25.20 at 2:21 p.m. New York time in Nasdaq Stock Market trading.

“It’s our policy not to comment on legal matters,” Steve Schick, a Blue Coat spokesman, said in an e-mailed message.

Blue Coat is looking for $465 million in loans to back the takeover, including a $415 million term loan and a $50 million revolving line of credit, according to a Dec. 9 regulatory filing.

The case is Robert N. McLain v. David Hanna and Blue Coat Systems Inc., CA7105, Delaware Chancery Court (Wilmington).

--Editors: Stephen Farr, Glenn Holdcraft

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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