Blue Coat Systems, Inc. Investor Files Lawsuit Against Directors Alleged Breach of Fiduciary Duty In Connection With Takeover

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Company Name(s): 
Blue Coat Systems
Case Name: 
Blue Coat Systems Deal Case 12/13/2011
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

San Diego, Dec. 9, 2011 (Shareholders Foundation) -- An investor in NASDAQ:BCSI shares filed a lawsuit in State Court in effort to stop the proposed acquisition of Blue Coat Systems, Inc by an investor group led by Thoma Bravo LLC for $25.81 per share.

According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed Blue Coat Systems, Inc. (NASDAQ:BCSI) investors arising out of the attempt to sell Blue Coat Systems at an unfair price via an unfair process..

On Friday, December 9, 2011, Blue Coat Systems, Inc. (Nasdaq: BCSI) announced that it has entered into an agreement to be acquired by an investor group led by private equity investment firm Thoma Bravo, LLC, in a transaction valued at approximately $1.3 billion. Under the terms of the proposed transaction, Blue Coat Systems, Inc shareholders will receive $25.81 in cash for each share of Blue Coat common stock they hold. Blue Coat Systems, Inc said the offer represents a premium of approximately 48% over Blue Coat’s closing price on December 8, 2011 and a premium of approximately 62% over the 60-day trailing average for the period ended December 8, 2011.

Following the announcement NASDAQ:BCSI shares jumped from $17.48 per share to $25.17 on December 9, 2011

However, the plaintiff alleges that the $25.81 offer undervalues the Web security company. In fact, BCSI stocks traded as high as $28.80 on April 29th, as high as $31.07 on Feb. 11th, and slightly over $32 in January 2011, thus well above the current offer. Additionally at least one analyst has set the high target price at $28 per share.

Furthermore, Blue Coat Systems’ 12months Revenue increased from $305.44million for a 12months period ending on April 30, 2008 to $487.11million for a 12months period ending on April 30, 2011.