Dionex Corporation Investor Files Lawsuit Against Buyout
An investor in Dionex Corp shares filed a lawsuit against Thermo Fisher Scientific, Dionex Corp and certain of its officers and directors for breaches s of fiduciary duty arising out of the attempt to sell Dionex Corp too cheaply to Thermo Fisher Scientific.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed investors in Dionex Corporation (NASDAQ:DNEX) in connection with the proposed takeover by Thermo Fisher Scientific.
On, Monday, December 13, 2010, Dionex Corporation (NASDAQ:DNEX) and Thermo Fisher Scientific (NYSE: TMO) announced that their Boards of Directors have approved a transaction under which Thermo Fisher Scientific will acquire all of the outstanding shares of Dionex Corp. (DNEX) for $118.50 per share in cash, or a total purchase price of approximately $2.1 billion. Dionex Corporation said the offer represents a 21% premium to Dionex's closing stock price on December 10, 2010, the last trading day prior to today's announcement and a 32% premium to Dionex's average closing stock price over the last 60 trading days.
Shares of Dionex Corporation (Public, NASDAQ:DNEX) jumped in response to the takeover announcement from $98.85 per share on Friday to $118.25 per share on Monday.
But the plaintiff alleges that while Dionex’s shareholders are being shut out from the company’s future growth prospects and the synergies involved in the deal, Thermo Fisher Scientific and Dionex have indicated that Doinex’s management is being offered post-acquisition positions in the combined company going forward. Dionex Corporation has performed well in the past for its shareholders. Dionex Corp’s 12 months Total Revenue went from $327.28million reported on June 30, 2007 to $419.61million reported on June 30, 2010. Its Net Income rose over the same time frame from $45.65million to $59.06million.
The plaintiff says the proposed acquisition is the product of a flawed process that was designed to ensure the acquisition of Dionex by Thermo Fisher Scientific, on terms preferential to defendants, and detrimental to the plaintiff and other Dionex’s shareholders. Rather than acting in the best interests of the Dionex’s shareholders, defendants spent substantial effort tailoring the structural terms of the proposed acquisition to aggrandize their own person interest and to meet the specific needs of Thermo Fisher Scientific, which efforts will eliminates the majority of the equity interest of Doinex’s shareholders. Dionex’s executive officers and board members as a group held as of August 01, 2010, 630,284 shares in Dionex and the proposed acquisition allows them to cash out nearly $75million in illiquid holdings that they otherwise could not have sold so quickly, so the plaintiff.