After a media report said that SeaChange International is reportedly in takeover talks with Arris Group Inc an investigation on behalf of investors of Sea Change International (NASDAQ:SEAC) over possible breaches of fiduciary duties was announced.
The investigation by a law firm is at a preliminary stage and monitors the takeover rumors. It concerns whether SeaChange International, certain of its officers and directors, and/or others will breach or breached their fiduciary duties owed to SeaChange International (NASDAQ SEAC) investors in connection with the takeover rumors or in the event of a takeover.
SeaChange Intl has performed well for its investors in the past. SeaChange Intls 12months Total Revenue rose from $179.89million reported on Jan. 31, 2008 to $216.73million reported on Jan 31, 2011. Its Net Income rose within the same time frame from $2.90million to $29.47million.
Shares of SeaChange International (Public, NASDAQ:SEAC) rose from as low as $4.87 per share in Febraury 09 to as high as $10.95 on April 8, 2011.
Then on May 26, 2011, a media report cited people familiar with the matter that the Arris Group is in talks to buy SeaChange Intl.
Following the announcement SEAC stock rose on May 27 to as high as $11.65 per share.
Therefore the investigation by a law firm questions whether a potential sale process and the potential price would be unfair to the shareholders of SeaChange International (NASDAQ:SEAC). The investigation focuses whether the SeaChange Intl. board of directors will undertake an adequate and fair sales process to obtain fair consideration for all shareholders of SeaChange International (NASDAQ:SEAC) and will breach their fiduciary duties to SeaChange (SEAC) shareholder by failing to adequately shop the Company before entering into any transaction. In addition the investigation seeks also to determine if any officer, director or any insiders violated any laws in connection with the takeover rumors. The investigation concerns also whether the acquirer would underpay for NASDAQ:SEAC shares, thus unlawfully harming SeaChange International investors. A potential class action lawsuit would seek to maximize the amount of money and information SEAC shareholders would receive in a buyout, so the law firm.