IBJNews

BrightPoint shareholder sues company over pending sale

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

  • Time to go after CELL
    Brightpoint's officers have become wealthy, especially Bob Laikin, without ever having paid any dividends to its investors. They took as much as they could out of this company for years! Anything that can be done to get more from them or their acquirer is a good move in my opinion.
  • Already
    These law suits never go anywhere and should not even be reported on. Obviously, management felt the price was sufficient to sell. The sale will probably save this investor a bunch of money in the long term. CELL was going nowhere fast.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. I still don't understand how the FBI had any right whatsoever to investigate this elderly collector. Before the Antiquities Act it was completely legal to buy, trade or collect Native American artifacts. I used to see arrow heads, axes, bowls, corn grinders at antique shops and flea markets for sale and I bought them myself. But that was in the late 60's and early 70's. And I now know that people used to steal items from sites and sell them. I understand that is illegal. But we used to find arrow heads and even a corn grinder in our back yard when I was a child. And I still have those items today in my small collection.

    2. I lived in California and they had many of the things noted in the proposed suggestions from the "Blue Ribbon Panel". California is near financial collapse now. Let's not turn the great state of Indiana into a third world dump like California.

    3. The temporary closure of BR Avenue will get a lot of attention. But, one thing reported by the IndyStar really stands out to me, and is extraordinarily depressing: “Police also have agreed to crack down on noise violations, traffic violations and public intoxication.” In other words, the police have generously agreed to do their jobs (temporarily, at least), instead of just standing around waiting for someone to call 911. When is someone in this department going to get off their fat arse (looking at you, Chief), get their minds out of 1975-era policing and into 2014, and have his department engage in pro-active work instead of sitting around waiting for someone to be shot? Why in the hell does it take 7 people getting shot in one night in one of the city’s biggest tourist destinations, to convince the police (reluctantly, it would appear) that they actually need to do their f’n jobs? When is the Chief going to realize that there’s a huge, direct, proven correlation between enforcing the law (yes, all laws, especially those affecting quality of life) and preventing larger crimes from occurring? Is it racial BS? Is that what this extraordinary reluctance is all about? Is the department and the city terrified that if they do their jobs, they might offend someone? Whom, exactly? Will the victims of violence, murder, assault, rape, robbery, and theft be offended? Will the citizens who have to tolerate their deteriorating quality of life be offended? Will the businesses who see their customers flee be offended? Or, is it simple ignorance (maybe the Chief hasn’t heard about NYC’s success in fighting crime - it’s only the biggest g*&#am city in the country, after all)? Either way, Chief, if you don’t want to do your job, then step down. Let someone who actually wants the job take it.

    4. I thought Indiana had all the funding it needed for everything. That's why the state lottery and casino gambling were allowed, as the new tax revenue would take care of everything the state wanted to do.The recommendations sound like they came from California. Better think about that. What is the financial condition of that state?

    5. I was a fan of WIBC in the morning, Steve was the only WIBC host that I listened too, he gave the news with so much flare that I enjoyed listening to him on my way to work. Katz is no Steve. Sadly, I will not be listening to WIBC anymore.

    ADVERTISEMENT