Austin software maker Bazaarvoice is facing a lawsuit that contends the company’s planned $521 million sale undervalues the company and hurts its shareholders.
The lawsuit, which was filed by a shareholder, says the sales process “was hamstrung by interference from activist stockholders of the company, who struck a settlement agreement with the company board in the midst of the sales process.”
That alleged agreement “significantly affected the composition of the company board, and, therefore, the process itself,” according to the lawsuit.
The lawsuit, which requests a jury trial, was filed in state district court in Travis Count by plaintiff Michael Schlaffer. The suit identifies Schlaffer as a Bazaarvoice stockholder living in Illinois.
Named as defendants are Bazaarvoice, company CEO Gene Austin and members of the company’s board of directors.
Bazaarvoice did not immediately respond to message left Wednesday seeking comment.
Bazaarvoice, which makes software for online and social media marketing, announced last month that it has agreed to be sold to Los Angeles-based private equity firm Marlin Equity Partners.
Last year, Bazaarvoice moved to a new 137,615-square foot headquarters in North Austin, which is home to about 600 employees. The company has 790 employees worldwide.
Under the deal, Marlin will acquire all outstanding common stock of Bazaarvoice for $5.50 in cash for a total value of $521 million.
On Nov. 27, the day the deal was announced, shares of Bazaarvoice closed up 13 percent, or 62 cents, at $5.43.
The lawsuit alleges that the deal is being driven by members of the board who will benefit financially. It says the company was on an upward trajectory and continually increasing financial results:
“The individual defendants have caused Bazaarvoice to enter into the proposed transaction, thereby depriving the plaintiff and other public stakeholders of the company the opportunity to reap the benefits of the company’s present and future success.”
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