Candela Corporation Board Of Directors Hit With Shareholder Lawsuit

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Company Name(s): 
Candela Corporation
Case Name: 
Candela Corporation Dealcase
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: CLZR
Lawsuit Overview
Type of Lawsuit: 
Other
Class Period End: 
09/09/2009
Summary: 

An investor filed a lawsuit against the board of directors of Candela Corporation (Public, NASDAQ:CLZR) alleging breaches of fiduciary duty.

According to the complaint the plaintiff alleges that the board of directors of Candela Corporation (Public, NASDAQ:CLZR) breached its fiduciary duty in connection with an agreement by the Candela's Board of Directors to sell all of Candela’s outstanding shares of common stock to Syneron Medical Ltd. on September 09, 2009 Candela Corporation (NASDAQ:CLZR) and Syneron Medical Ltd. (NASDAQ:ELOS) announced that they have entered into a definitive agreement to combine the companies in an all stock transaction. Under the terms of the proposed transaction, shareholders of Candela will receive 0.2911 shares of Syneron ordinary shares for each share of Candela owned (the "Exchange Ratio"). Syneron will issue 6.7 million ordinary shares, valuing Candela at approximately $2.84 per share. The transaction valued at approximately $65 million. The Boards of Directors of both companies unanimously approved the combination and according to Candela the consideration represents a premium of approximately 51% to the closing stock price of Candela common stock on September 8, 2009.

But according to a previous investigation by a law firm the investigation “concerns the proposed Exchange Ratio offered to Candela shareholders and the process by which Candela's Board of Directors is addressing the proposed transaction. The transaction is expected to close by year end. The focus of the investigation is on whether the Candela Board of Directors breached their fiduciary duties to Candela's shareholders by agreeing to sell the Company at an unfair price.” Another investigation “is focused on the potential unfairness of the proposed merger price and of the process by which the Candela Board of Directors is addressing the offer. The Company's shares traded at a 52-week high of over $3.00 per share.” One investigation “concerns whether the Candela Board of Directors breached their fiduciary duties to Candela shareholders given that (i) the Company's shares traded at a 52-week high of $3.15; (ii) at least one analyst has set a $4.00 per share price target for Candela stock; and (iii) the Company has a book value of more than $3.40 per share.” And one investigation even called the “suspicious because it appears from a review of the Company's financial statements that the inherent value of the Company's stock is greater than $2.84 per share, because the stock traded significantly higher than $2.84 within the last year and also the deal calls for the same Candela Board of Directors approving the sale to take good new jobs in Syneron.”

Candela Corporation, located in Wayland, MA, is engaged in the development and commercialization of aesthetic laser and light-based systems that allow physicians and personal care practitioners to treat a range of cosmetic and medical conditions. Candela Corporation reported in 2007 (ending on 06/28/2008) Total Revenue of $146.62million and in 2008 (ending on 06/27/2009) Total Revenue of $11.58million. Shares of Candela Corporation increased from $2.84 per share on the day of the announcement to recently $3.35 per share.