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BrightPoint reaches settlement in shareholder suits

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Lawsuits filed by BrightPoint Inc. shareholders who are challenging the company's proposed sale to a California firm are set to be dismissed after the sides reached a settlement.

Indianapolis-based Brightpoint announced in early July that it had agreed to be acquired by Ingram Micro Inc. for about $840 million.

Terms of the deal call for Ingram Micro to acquire all outstanding shares of BrightPoint’s common stock for $9 per share in cash. But the shareholders argued in two complaints that the purchase price is too low because it uses a depressed stock price rather than its 52-week high of more than $12 per share.

BrightPoint shares traded at $8.96 Friday morning, down 1 cent. The price has barely fluctuated since the acquisition was announced.

Under the settlement, reached Tuesday, BrightPoint will pay no damages, but has agreed to provide more financial information to shareholders before they vote on the proposed sale. A vote is set for Sept. 19.

The lawsuits alleged that the company’s proxy statement outlining details of the transaction contained “materially false and misleading information.”

Indianapolis attorney Henry Price, who represents some of the shareholders, said he hasn’t seen the settlement but is pleased with the agreement.

“I know that they’ll get more disclosures so they can make an informed decision [on the sale],” he said. “That was the thrust of the lawsuit.”

Shareholders filed the first lawsuit in late July and the other in early August in U.S. District Court in Indianapolis, seeking class-action status.

The sale is expected to close by the end of the year, the companies said in July.

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.

BrightPoint was named one of the country’s 500 largest companies in 2011, ranking 463rd with $5.2 billion in revenue. Ingram was ranked 81st, with $36.3 billion in revenue.

Six top BrightPoint executives are expected to share a $30.7 million payout as part of the planned sale, with CEO Robert Laikin in line to receive $14.1 million.
   
 
 

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

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