Lucent Pays for Shareholder Peace
The Superior Court of New Jersey, Law Division, Union County, was due to decide this Wednesday, September 6, whether to grant an injunction to postpone Lucent's special meeting a day later, when its shareholders are due to vote on the Alcatel merger. (See Alcatel Lucent Merger Under Fire.)
The court action was brought by a group of shareholders who initiated a class action suit in April this year, known as "Resnick v. Lucent Technologies Inc. et al," following Lucent's announcement that it plans to merge with Alcatel. (See Alcatel, Lucent Seal Deal.)
But despite saying that the action was "without merit," and that "we do not believe that the standards for granting an injunction will be met," Lucent felt concerned enough to buy off the shareholders. In a filing with the Securities and Exchange Commission (SEC) made late Friday evening, Lucent disclosed it had "entered into memorandum of understanding [MOU] with the plaintiffs" to settle the Resnick and another, separate class action suit, known as "AR Maley Trust v. Lucent Technologies, et al," related to the merger.
Both class actions were brought by shareholders that were claiming the merger failed to maximize shareholder value.
The terms of the MOU mean that Wednesday's court hearing has been cancelled. Lucent noted also that the settlement with the shareholders required court approval and "consummation of the merger." The financial terms were not revealed, though Lucent noted they'll be "furnished at a later date." How stylish.
Both Lucent and Alcatel are holding shareholder meetings to vote on the merger this Thursday. Alcatel's is due to take place at the Palais Omnisports of Paris-Bercy at 2 p.m. Paris time (8 a.m. Eastern time), while Lucent's is at the DuPont Theatre in Wilmington, Del., at 11 a.m. Eastern.
— Ray Le Maistre, International News Editor, Light Reading