Robbins LLP: Acquisition of Harman International Industries, Incorporated (HAR) by Samsung Electronics Co., Ltd. (005930) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Harman International Industries, Incorporated (NYSE: HAR) by Samsung Electronics Co., Ltd. (Korea SE: 005930). On November 14, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Samsung Electronics will acquire Harman International. Under the terms of the agreement, Harman International shareholders will receive $112 for each share of Harman International common stock.
Is the Proposed Acquisition Best for Harman International and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Harman International is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $112 merger consideration represents a premium of only 38.10% based on Harman International’s thirty-day average closing price for the period ending November 14, 2016. This premium is significantly below the average one month premium of nearly 63.85% for comparable transactions within the past year. In the last three years, Harman International traded as high as $149.12 on April 23, 2015, and most recently traded above the merger consideration – at $112.68 – on October 29, 2015.
On November 3, 2016, Harman International reported strong earnings results for its first quarter 2017. Harman International reported net sales of $1.8 billion for the three months ended September 30, 2016, an 8% increase from the same period of the prior year. Harman International also reported adjusted earnings per share of $1.45, a 20% increase from the same period of the prior year. Additionally, Harman International has beaten analyst estimates for adjusted net income and adjusted earnings per share for three of the past four quarters. In commenting on these results, Harman International Chief Executive Officer, President, and Chairman of the Board Dinesh C. Paliwal remarked, “HARMAN delivered a solid first quarter, with strong revenue growth and outstanding EBITDA and EPS performance. We secured $2 billion in new automotive awards in the quarter, demonstrating increasing demand from automakers and their drivers for a rich in-car experience, including embedded infotainment, cloud connectivity and sound management solutions. With cyber security an underlying and fundamental component of the connected car and autonomous driving, I am proud to add that NHTSA and the University of Michigan rated HARMAN’s suite of intrusion detection and mitigation technologies as the best performing solution.”
In light of these facts, Robbins LLP is examining Harman International’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Harman International shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Harman International shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.