RAE Systems Inc. Acquisition Under Investigation

If you are a current investor in RAE Systems Inc. (AMEX:RAE) shares, who purchased your RAE stock prior to Monday, September 20, 2010, and/or have information relating the investigation, you have certain options and you should contact the Shareholders Foundation.

To have your information reviewed for options and to recieve notifications about this investigation, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
RAE Systems
Affected Securities: 

An investigation on behalf of current investors of RAE Systems Inc. (AMEX:RAE) concerning possible breaches of fiduciary duty by certain members of the RAE Systems board of directors in connection with their attempt to sell RAE Systems to an affiliate of Battery Ventures was announced.

The investigation by a law firm concerns whether the affiliate of Battery Ventures, RAE Systems Inc. and its Board breached their fiduciary duties owed to RAE Systems Inc. (AMEX:RAE) investors in connection with the recently proposed takeover.

On Monday, September 20, 2010, San Jose, California based RAE Systems Inc. (Amex: RAE) signed an agreement, which has been unanimously approved by its board of directors, to be acquired for $1.60 per share in cash by an affiliate of Battery Ventures. According to RAE Systems the purchase price represents a premium of approximately 53.8% over RAE Systems' closing share price on September 17, 2010, and a premium of approximately 85.1% over RAE Systems' average closing share price for the 30 trading days ending on September 17, 2010.

But the investigation concerns whether there is a breach of fiduciary duties by not seeking a deal that will provide better value for RAE Systems Inc. (AMEX:RAE) investors, and whether the affiliate of Battery Ventures is underpaying for RAE Systems Inc., thus unlawfully harming RAE stockholders.

Shares of RAE Systems Inc. (Public, AMEX:RAE) traded at $1.12 per share the trading day before the announcement and jumped to $1.58 per share after the news. During 2008 RAE shares traded as high as $2.64 per share before declining in the midst of the financial crisis to as low as $0.36 per share in January 2009. But RAE shares traded during 2007 at $3.73 per share and during 2006 over $4 per share. In addition between 2006 and 2009 RAE Systems’ revenue was relatively consistent. In the past four years RAE Systems reported total revenue between $67.72million and $95.38million. RAE Systems also reported strong revenues of $23.3 million for second quarter 2010, above consensus of $20.1 million and earnings per share of $0.03 per share versus consensus of $0.01.

The investigation also concerns whether the RAE Systems Board of Directors breached their fiduciary duty to RAE Systems Inc. (RAE) stockholders by failing to adequately shop the Company prior to entering into the agreement.