CyberSource Corporation Investors File Lawsuit
An investor in CYBS shares filed a lawsuit in State Court on behalf of current investors in CyberSource Corporation (NASDAQ:CYBS) alleging breaches of fiduciary duty for selling CyberSource Corp. too cheap to Visa, Inc.
CyberSource Corporation, Mountain View, California, is a provider of electronic payment and risk management solutions. Its solutions enable electronic payment processing for Web, call center, and point-of-sale environments.
On Tuesday, April 21, 2010, CyberSource Corporation (Nasdaq: CYBS) and Visa Inc. announced that they have entered into a definitive agreement for Visa Inc. to purchase CyberSource Corp. at a price of $26.00 per CYBS share, or total consideration of approximately $2.0 billion to be paid with cash on hand. The transaction has been approved by CyberSource boards of directors.
According to the complaint the plaintiff alleges breaches of fiduciary duty in connection the attempt to sell CyberSource Corporation (CYBS) to Visa Inc. CyberSource partners with and connects to a network of payment processors and other payment service providers to offer merchants a single source solution.
Shares of CyberSource Corporation (CYBS) traded after the takeover news at $25.61 per share, and at $19.75 days before the news.
The defendants breached their fiduciary duty by agreeing to an agreement that undervalues CyberSource Corporation shares and by selling itself through an unfair process to Visa, Inc., so the lawsuit. The plaintiff alleges, among other things, that the proposed transaction includes “various deal protections” such as an “anit-solicitation” and $65million termination fee provision and “represents an opportunistic attempt by Visa and the Company’s management to capitalize on CyberSourc’s prospects without paying a fair value”.