Over 98% of Avanex stockholders approve the deal, but Oplink's Taiwanese stockholders refuse support, killing the merger

August 16, 2002

2 Min Read

FREMONT, Calif. -- Avanex Corporation (Nasdaq: AVNX) announced today that based on votes cast at yesterday's special meeting of stockholders of Oplink Communications (Nasdaq: OPLK), the merger between Avanex Corporation and Oplink Communications did not receive sufficient votes for approval.While approximately 75% of the votes cast at yesterday's special meeting of Oplink stockholders favored the merger, Oplink failed to capture support from nearly any of its Taiwanese-based stockholders, who collectively own over 40% of Oplink's outstanding shares. As a result, Oplink did not receive the vote of a majority of its outstanding shares, which was required for approval of the merger.Two major funds controlled by relatives of Oplink Chairman Joe Liu, that own over 16% of Oplink's outstanding shares, as well as virtually every other Taiwanese institutional fund, did not support the merger. In contrast, every significant U.S.-based institutional stockholder of Oplink, as well as numerous individual stockholders, supported the merger.At yesterday's special meeting of Avanex stockholders, over 98% of the votes cast were in favor of the merger.Institutional Shareholder Services, the nation's leading independent proxy advisory firm, recommended that stockholders of both companies vote in favor of the merger. Avanex President and CEO Paul Engle noted: "Avanex has a clear strategy for growth of which the merger with Oplink was just one potential initiative. We will now expand our use of outsourced manufacturing to lower costs primarily through utilizing offshore companies, continue to bring new modules and subsystems into the market to improve performance and cost-effectiveness in optical networks, and continue to prudently use our resources to strengthen Avanex so that it is in the best possible position to take advantage of the turnaround in our markets when that occurs."In a separate release:SAN JOSE, Calif. -- Oplink Communications, Inc. (Nasdaq: OPLK), a leading designer and manufacturer of innovative optical subsystem technologies, today reported that at a special meeting of Oplink stockholders held on August 15, 2002, the proposed merger between Oplink and Avanex Corporation was not approved by the requisite vote of the stockholders of Oplink. In accordance with the terms of the merger agreement, Oplink has terminated the merger agreement with Avanex as a result of the failure to receive Oplink stockholder approval."While officers of the Company and our Board of Directors voted for the merger, we are following the directive of our stockholders and are confident that we can continue to build a strong, independent company," said Fred Fromm, Oplink President and Chief Executive Officer. "In the current market, we plan to continue to keep our costs down while looking for opportunities to increase revenues and position ourselves for the return of the telecommunications equipment market. With approximately $225 million in cash and short term investments as of June 30, 2002 and a low cash burn from operations, we believe that Oplink is well positioned to weather this sustained telecommunications downturn and emerge as a stronger company in the future." Avanex Corp.Oplink Communications Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like