A pair of Lawson Software shareholders have filed a class action lawsuit to block the ERP (enterprise resource planning) software vendor's sale to Infor and its parent company Golden Gate Capital, according to documents filed Tuesday in US District Court for the District of Minnesota.
Lawson and Infor officials violated state law and U.S. securities rules by reaching an agreement, announced in March, to sell Lawson "at an unfair price of $11.25 per share via an unfair process," according to the lawsuit by shareholders Marcia Green and Austen Swaim. At that price, Infor would buy Lawson for roughly $1.8 billion.
After Infor's offer, Lawson's share price rose to more than $12. In addition, "premiums in comparable acquisitions announced within the last twelve months have averaged more than triple what Lawson shareholders will receive should the Proposed Acquisition be consummated," the lawsuit stated.
The proposed deal is also designed to ensure Lawson will be sold "on terms preferential" to certain officials at the companies, "but detrimental to plaintiffs and other public stockholders of Lawson."
The lawsuit notes that investor Carl Icahn took an 8.5 percent stake in the company last year. Icahn is known as an "activist" investor for his practice of actively trying to change a company's direction in ways he believes will benefit shareholders.
While observers speculated that Icahn would push for a sale of Lawson, the shareholder suit presents an twist on that scenario.
"Rather than maximize shareholder value as a stand-alone company, the Board is attempting to sell the Company now so as to prevent Icahn from potentially using his significant stake in Lawson as a means of attempting to oust management," it stated. If the deal gets approved, "management will be able to retain their positions with the go-forward company and successfully avoid any possible attempt to replace them by Icahn and the other shareholders who are unhappy with their stewardship."
Icahn could not immediately be reached for comment Wednesday.
The plaintiffs are asking for an injunction stopping the sale and a directive ordering the defendants "to obtain a transaction which is in the best interests of Lawson's shareholders."
It's not clear whether one would come from another vendor besides Infor. In a proxy statement on the deal that Lawson filed last month, it referred to sale talks with a number of additional unnamed parties, but those discussions apparently did not lead to a superior bid.
Lawson, which is known for its strong presence in health-care software, had been negotiating with Infor since mid-2010, according to the proxy.
An Infor spokesman declined comment. Lawson did not respond to a request for comment.
Shareholder lawsuits are a common occurrence during tech mergers and acquisitions, but rarely seem to drastically impede or stop deals from being completed. Earlier this week, SAP said a court had granted preliminary approval of a settlement tied to class action litigation brought by shareholders of Sybase, which SAP bought last year.