Lawson Software, Inc. Investors Sue Directors In Effort To Stop Buyout

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Company Name(s): 
Lawson Software
Case Name: 
Lawson Software Deal Case 06/10/2011
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

An investor in Lawson Software, Inc. (NASDAQ: LWSN) shares filed a lawsuit in effort to block the proposed acquisition of Lawson Software by Infor and its parent company Golden Gate Capital.

According to the complaint the plaintiffs allege that the defendants breached their fiduciary duties in connection the proposed merger.

On Tuesday, April 26, 2011, Lawson Software, Inc. (Nasdaq:LWSN) announced that it has signed a definitive agreement to be acquired by GGC Software Holdings, Inc., an affiliate of Golden Gate Capital and Infor, in a transaction valued at approximately $2 billion. Under the terms of the merger agreement, stockholders of Lawson will receive $11.25 per share in cash.

The plaintiff alleges that the offer is unfair to Lawson Software investors. Indeed shares of Lawson Software, Inc. (LWSN) traded on Monday April 25 as high as $12.50 per share and therefore the acquisition price represents a discount from Lawson Software’s closing price the day before the announcement. Additionally at least one analyst has set a target price as high as $15.00 per share

Furthermore Lawson Software has performed well for its investors in the past. Lawson Software, Inc. reported over the past four filing periods relatively consistent 12months Total Revenues ranging from $736.41million to $851.93million. Its Net Income increased over the same time frame to Net Income of $13.02million

Additionally the plaintiff alleges that the proposed takeover is designed to ensure Lawson Software will be sold on terms preferential to certain officials at the companies, but detrimental to plaintiffs and other public stockholders of Lawson Software.