Radiant Systems, Inc. Investor Files Lawsuit Against Directors In Effort To Stop Takeover
An investor in shares of Radiant Systems, Inc. (NASDAQ: RADS) filed a lawsuit in State Court against directors of Radiant Systems in effort to block the proposed takeover of Radiant Systems by NCR Corp.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties arising out of their attempt the sell Atlanta, Georgia based Radiant Systems Inc. too cheaply via an unfair process to NCR Corp at $28 per share.
On Monday, July 11, 2011, Radiant Systems, Inc. (NASDAQ: RADS) and NCR Corporation (NYSE: NCR) announced an agreement for NCR Corp. to acquire Radiant Systems through a cash tender offer of $28.00 per Radiant Systems share or for approximately $1.2billion.
Following the takeover announcement shares of Radiant Systems, Inc. (NASDAQ: RADS) rose in after-hour trading by 30.30% to $27.95 per share.
However, the plaintiff alleges that the $28-offer undervalues Radiant Systems’ stock because the intrinsic value of Radiant Systems common stock is materially higher than the amount offered.
Radiant Systems has performed well for its investors. Its annual Total Revenue rose from $253.20million in 2007 to $346.41million in 2010. Radiant Systems was able to pull out of a Net Loss of $9.40million in 2009 and reported for 2010 $21.82million Net Income. Its first quarter quarterly Revenue rose from $79.55million a year earlier to $87.14million and its first quarter quarterly Net Income rose from $2.60million for the first in 2010 to $6million for the first quarter in 2011.
Additionally the plaintiff alleges that the board of directors of Radiant Systems breached its fiduciary duties to Radiant Systems’ public shareholder by failing to adequately shop the company before entering into the proposed acquisition at an inadequate price.
Furthermore, so the plaintiff, the Radiant Systems board of directors breached its fiduciary duties by agreeing to onerous and unreasonable deal protection devices, such as a ‘no-shop’ provision and a $35.7million termination fee that may effectively preclude other topping bids.