JDA Software Group Inc. (JDAS:US) was sued by an investor who claimed that RedPrairie Corp.’s proposed $1.9 billion takeover offer shortchanges shareholders.
The transaction is the product of an “abbreviated sales process” and comes at an unfair price, investor Tammy Neuman said in a complaint made public today in Delaware Chancery Court. “The structure of the proposed acquisition does not provide for adequate value for the company.” Neuman is seeking to represent all JDA shareholders in her bid to bar the deal.
RedPrairie, backed by New York-based private-equity firm New Mountain Capital LLC, agreed to pay $45 a share for Scottsdale, Arizona-based JDA in a deal that merges two providers of software for managing corporate supply chains. The deal would create a supply-chain software company with more than $1 billion in revenue.
The announced price fails to account for $412 million in cash JDA has on its books (JDAS:US), according to the complaint. The deal also doesn’t adequately account for exclusive contracts, patents and other valuable intangible assets JDA brings to the buyout group, Neuman said in the complaint.
Neuman accused JDA’s directors (JDAS:US) of using the acquisition to shield themselves from the consequences of a U.S. Securities and Exchange Commission investigation into accounting matters.
The directors “were motivated to enter into the merger agreement out of a sense of self-preservation and are not seeking to maximize shareholder value,” Neuman said.
Stephen Phillips, a spokesman for JDA, didn’t immediately return a phone call and e-mail seeking comment on the complaint.
The case is Neuman v. JDA Software Group Inc., CA8049, Delaware Chancery Court (Wilmington)
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