A BrightPoint Inc. stockholder has filed suit against the company, charging that the $9 share price offered in its $840 million sale to California-based Ingram Micro Inc. is too low.
Hilary Coyne brought the suit July 12 against Indianapolis-based BrightPoint and several of its officers in Marion Superior Court and is seeking class-action status on behalf of all BrightPoint shareholders.
Coyne accuses the company and its officers of breaching their fiduciary duty to shareholders and is asking a judge to issue an injunction to prevent BrightPoint and Ingram from completing the deal. Damages should be awarded if a court judgment is not issued before the sale is complete, the lawsuit says.
The deal is expected to close by the end of the year, the companies said when announcing it on July 2.
BrightPoint, founded in Plainfield in 1989, provides logistics to sellers of wireless devices. It has more than 1,300 employees in the Indianapolis area and 4,000 worldwide.
Santa Ana-based Ingram Micro is set to acquire all outstanding shares of BrightPoint’s common stock for $9 per share in cash. But Coyne argues in her suit that the price is “woefully inadequate” because it’s based on current company conditions that have depressed the price rather than its 52-week high of more than $12 per share.
BrightPoint’s announcement in February that it had lost key customer Cricket Communications Inc. was "exaggerated in the market," the complaint argues, and sent the stock sliding to the $9 range.
BrightPoint’s first-quarter results released in April, however, paint a much brighter picture, the suit said, showing that company revenue increased 23 percent, to nearly $1.4 billion, from the same period in 2011. In addition, BrightPoint handled 29.2 million mobile devices in the first quarter, a 7-percent increase from the first three months last year.
The strong earnings had at least one BrightPoint analyst predicting before the sale announcement that the company’s share price could rebound to $12 in the coming months, the suit said.
BrightPoint stock was fetching $8.90 per share Monday morning, but had fallen as low as $4.50 late last month before the announcement of the sale.
The $9-per-share acquisition price is a 66-percent premium to BrightPoint’s closing price of $5.41 on the Friday before the sale announcement and a 35-percent premium to BrightPoint’s 90-day average trading price.
Coyne further argues that the sale agreement includes a “no solicitation” provision barring BrightPoint officers from soliciting other offers, and a $26 million termination penalty payable to Ingram Micro if BrightPoint backs out on the deal.
“The preferential treatment accorded to Ingram Micro has deprived and will continue to deprive the BrightPoint shareholders of the very substantial premium that unfettered and evenhanded exposure of the company to the market could produce,” the suit said.
A BrightPoint officer said a company policy prevented him from commenting on pending litigation.
Coyne is represented by the New York law firm of Gardy & Notis LLP and local counsel Cohen & Malad LLP.