APAC Customer Services, Inc. Investor Files Lawsuit To Stop Takeover

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Company Name(s): 
APAC Customer Services
Case Name: 
APAC Customer Services Deal Case 08/05/2011
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: APAC
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
08/05/2011
Summary: 

San Diego, Aug 05, 2011 (Shareholders Foundation) -- An investor in shares of APAC Customer Services, Inc. (NASDAQ: APAC) filed a lawsuit against directors of APAC Customer Services in effort to block the proposed acquisition by One Equity Partners.

According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to APAC Customer Services, Inc. (NASDAQ: APAC) investors arising out of the attempt to sell APAC Customer Services too cheaply via and unfair process.

On Thursday, July 7, 2011, APAC Customer Services, Inc. (Nasdaq: APAC) and One Equity Partners announced that they have entered into an merger agreement under which an affiliate of One Equity Partners will acquire 100% of APAC Customer Services, Inc, through an all-cash transaction with an aggregate equity value of approximately $470 million. Under the terms of the proposed transaction, One Equity Partners will pay APAC Customer Services, Inc stockholders $8.55 per APAC share in cash. APAC Customer Services, Inc. said the offer represents a premium of approximately 57% over APAC Customer Services' closing share price on July 6, 2011, the last trading day prior to the announcement.

Indeed, following the takeover news shares of APAC Customer Services, Inc. (Public, NASDAQ:APAC) rose from $5.45 on Wednesday to $8.44 on Thursday.

However, the plaintiff alleges that the $8.55offer undervalues the company.

In fact, APAC Customer Services has performed well for its investors in the past. APAC Customer Services’ 52weeks Total Revenue rose from $224.68million in 2007 to $325.96million in 2010.
APAC Customer Services reported net income of $7.0 million (or $0.13 per share) for the first quarter, compared to $6.6 million (or $0.12 per share) in the prior year quarter. APAC Customer Services also recently announced that it continues to expect earnings of $0.47 to $0.49 per share for fiscal 2011, and revenue of $346 million to $350 million

Furthermore, Theodore G. Schwartz, Chairman of APAC Customer Services and his affiliated entities, representing approximately 39% of APAC's outstanding shares, have already entered into a voting agreement to vote in favor of the transaction