January 24, 2014 (Shareholders Foundation) - An investor, who currently hold shares of shares of Harris Interactive Inc. (NASDAQ:HPOL) filed a lawsuit in effort to halt the proposed takeover of Harris Interactive Inc. by Nielsen Holdings N.V. for $2.00 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:HPOL stockholders arising out of the attempt to sell Harris Interactive Inc. too cheaply via an unfair process to Nielsen Holdings N.V.
On November 25, 2013, Harris Interactive Inc. (NASDAQ:HPOL) announced that it has entered into a merger agreement to be acquired by Nielsen Holdings N.V. (NYSE: NLSN). Under the terms of the merger agreement, Nielsen Holdings N.V. will commence a tender offer to acquire all of the outstanding shares of Harris Interactive’s common stock through a wholly owned subsidiary formed for the purpose of making the offer. Holders of outstanding shares of Harris Interactive Inc. (NASDAQ:HPOL) common stock will receive $2.00 per share in cash, subject to adjustment as provided in the merger agreement.
However, the plaintiff alleges that the $2.00-offer is grossly unfair and undervalues Harris Interactive Inc. The plaintiff claims that the proposed transaction provides no meaningful premium. Indeed, shares of Harris Interactive Inc. traded as high as $2.19 per share as recently as August 2013. Furthermore, Harris Interactive’s performance improved lately. For instance, it reported that its Total Revenue declined from $147.50 million for the 12 months period that ended on June 30, 2012 to $140.32 million for the 12 months period that ended on June 30, 2013, while its Net Loss of $5.58 million for the 12 months period that ended on June 30, 2012 turned into a Net Income of $6.91 million for the 12 months period that ended on June 30, 2013. Shares of Harris Interactive Inc. (NASDAQ:HPOL) grew from $0.30 per share in October 2011 to as high as $2.19 per share in August 2013.
In addition, the plaintiff alleges that the process is unfair to NASDAQLHPOL investors. In fact, certain of the directors of Harris Interactive have already entered into tender and support agreements, representing approximately 12% of the outstanding shares of Harris Interactive's common stock, pursuant to which they have agreed to tender all of their shares pursuant to the tender offer. The plaintiff claims that the board of directors effectively locked up the Proposed Transaction in favor of Nielsen Holdings N.V with deal protection devices, such as a strict no-solicitation, matching rights, and $3.7 million termination fee provision, that preclude other bidders from making successful competing offers for Harris Interactive Inc.
On December 27, 2013, NASDAQ:HPOL shares closed at $2.00 per share.