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Harman shareholders file class-action lawsuit opposing its $8Bn acquisition by Samsung

Samsung’s aggressive push into the connected mobility might face some roadblocks in the coming weeks. Some Shareholders of the U.S auto parts maker Harman, recently acquired by them for $8 billion, have filed a class-action lawsuit opposing the merger. This development was first reported by South Korean publication Yonhap on Friday.

According to the report, shareholders have filed the lawsuit against Harman’s CEO Dinesh Paliwal and the board of directors. The same has been filed in a court of Delaware and alleges the company of not acting in good faith while negotiating their merger deal with Samsung. The shareholders are of the opinion that the company board has hurried in accepting a low-value price for their business.

The lawsuit filed by a cohort of shareholders is being spearheaded by Robert Pine. In his complaint, he alleges that the company board put a less than favorable price tag on their globally recognized auto parts and audio business. The Acquisition deal has been agreed to a value lower than its corporate value, thus causing shareholder monetary damages, reports Yonhap.

Pine has further mentioned that there is a fundamental flaw in the $8 billion Samsung-Harman acquisition deal. The shareholders have also voiced their views against Harman’s decision for not courting bids from other competitors. A similar viewpoint had also been expressed by U.S-based hedge fund and Harman stakeholder Atlantic Investment Management back in December. Thus, the shareholders along with the said hedge fund will potentially vote against the acquisition due to its low price.

In addition, Samsung was readying itself to gain momentum lost due to the explosive Note 7 mishap. But it is also facing negative PR due to its alleged involvement in the President Park corruption scandal. Just yesterday, Samsung Electronics Chairman Lee Kun-hee was quizzed about his participation in the same for more than 22 hours. This is further making the Korean giant’s shareholders view them under a more negative light. Thus, there are worries that they also might vote against the Harman merger.

Announced back in November last year, Samsung had agreed to an $8 billion all-cash acquisition of Harman’s assets. Harman is widely known for its electronic products and audio accessories which it markets under various brands, including JBL, Infinity, Mark Levinson, Harman/Kardon, among others. The Korean giant has agreed to pay $112 per share and the transaction will go through even if 50 percent shareholders agree to the deal. It is expected to close in the first quarter of 2017.

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Harman shareholders file class-action lawsuit opposing its $8Bn acquisition by Samsung

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