Acquisition of Oplink Communications, Inc. (OPLK) by Koch Industries, Inc. May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Oplink Communications, Inc. (NASDAQ: OPLK) by Koch Industries, Inc. On November 19, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Koch Industries will acquire Oplink Communications. Under the terms of the agreement, Oplink Communications shareholders will receive $24.25 in cash for each share of Oplink Communications common stock.
Is the Proposed Acquisition Best for Oplink Communications and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Oplink Communications is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $24.25 merger consideration represents a premium of only 14.1% based on Oplink Communications’ closing price on November 18, 2014. This premium is significantly below the average one-day premium of 32.1% for comparable transactions within the past three years. Further, the $24.25 merger consideration is significantly below the target price of $26.25 set by an analyst at B Riley & Co on October 31, 2014.
On October 30, 2014, Oplink Communications released its earnings results for its first quarter 2015, reporting strong quarterly earnings. Specifically, Oplink Communications reported revenue for the quarter of $57.1 million, an increase of 12% from prior quarter revenue of $51.1 million, and a 4% increase from first quarter fiscal 2014 revenue of $54.8 million. GAAP net income for the first quarter, which includes the results of Oplink Connected, was $0.6 million, or $0.04 per diluted share, compared to a net loss of $4.2 million, or ($0.23) per diluted share, in the prior quarter. In commenting on these results, Oplink Communications Chairman and Chief Executive Officer Joe Liu remarked, “We are pleased to announce our highest ever quarterly revenue, driven primarily by demand in the North American datacom markets and the continued wireless network build-out in China. These results highlight the fundamental strength of our core optical business, and we are intently focused on capitalizing on the growth opportunities ahead.”
In light of these facts, Robbins LLP is examining Oplink Communications’ 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.
Oplink Communications 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.
Oplink Communications 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.