Major Harman shareholders have filed a class action lawsuit to try and block the sale of the company to Samsung. The suit was filed in Delaware Chancery Court against the company’s directors and claims that the directors are selling the company for too little money when they agreed on the $8 billion price tag with Samsung. The suit specifically claims “breach of fiduciary duty” by Harman Chairman, President and CEO Dinesh Paliwal, saying that Paliwal and the other directors were not acting in the best interest of the company or its shareholders. The filing also calls the deal “flawed and undervalued” and raise an objection to the self-imposed $240 Million termination fee, if Harman were to pursue other bids besides Samsung’s.
There is a shareholder’s meeting in the first quarter of this year to discuss the matter and this could cause a major backlash against the merger. Many in the AV market have expressed concern that Samsung could be buying Harman exclusively for the auto products division and may not pay attention to the ProAV brands that Harman holds, such as Crown, AMX, JBL, dbx, Soundcraft and Lexicon.
Analyst Comment
Given the push that Samsung has put into the B2B segment of its display business, I’m surprised that some are concerned about the purchase in ProAV. No doubt, there will be some comments at ISE! (BR)
