Cogent, Inc. Investor Files Lawsuit Against 3M Takeover

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Company Name(s): 
Cogent Systems
Case Name: 
Cogent Systems Deal Case 09/01/2010
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: COGT
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
09/01/2010
Summary: 

An investor of Cogent, Inc. (NASDAQ:COGT) filed a lawsuit in State Court against members of the board of directors of Cogent over alleged breaches of fiduciary duty arising out of the attempt to sell Cogent too cheaply to 3M.

According to the complaint the plaintiff alleges that the defendants breached their fiduciary duty in connection with the attempt to sell Cogent to 3M at an unfair price through an unfair process. On Monday, August 30, 2010, 3M and Cogent announced that 3M will acquire Cogent pursuant to an all cash offer. Under the terms of the agreement, Cogent stockholders will receive cash of $10.50 in exchange for each share of Cogent common stock. The proposed transaction has an aggregate value of approximately $943 million, or approximately $430 million net of cash acquired.

But shares of Cogent, Inc. (NASDAQ: COGT) jumped in response to the takeover news above the offer to over $11 per share and traded as early as May 2010 COGT shares at the current offer price of $10.50 per share, on April 26, 2010 above the offer at $10.61 per share, and in January even at $11.29 per share. During 2008 COGT shares reached almost $14 per share. During 2007 COGT shares traded over $15 per share, and during 2004 and 2005 above $30 per share. At least one analyst set a price target at $16.00 per share.