Robbins LLP: Acquisition of Opower, Inc. (OPWR) by Oracle Corporation (ORCL) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Opower, Inc. (NYSE: OPWR) by Oracle Corporation (NYSE: ORCL). On May 2, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Oracle will acquire Opower. Under the terms of the agreement, Opower shareholders will receive $10.30 in cash for each share of Opower common stock.
Is the Proposed Acquisition Best for Opower and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Opower is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $10.30 merger consideration represents a premium of only 30.4% based on Opower’s closing price on April 29, 2016. This premium is below the average one day premium of 37.6% for comparable transactions within the past five years. Further, the $10.30 merger consideration is below the target price of $11.50 set by an analyst at Cowen on March 1, 2016. In the last three years, Opower traded as high as $26.00 on April 4, 2014, and most recently traded above the merger consideration – at $10.41 – on January 6, 2016.
On February 29, 2016, Opower reported strong earnings results for its fourth quarter and full year 2015. Total revenue for the fourth quarter of 2015 was $40.5 million, an increase of 16% from the comparable period in 2014. Large, long-term contracts signed in 2015 increased Opower’s backlog to $480 million as of the end of 2015, nearly double what it was at the end of 2014. Opower also successfully launched a series of new products including NextWeb and Bill Advisor; and completed the rollout of its software platform. Opower beat consensus analyst estimates for revenue and adjusted net income in last four quarters. In commenting on these results, Opower Chief Executive Officer Dan Yates remarked, “2015 was a strong year for Opower. We renewed and expanded contracts with our three largest clients – Pacific Gas and Electric (PG&E), National Grid, and Exelon – and added significant new clients including Con Edison in New York and a major European utility, each of which signed in Q4. We’re seeing great traction with our Customer Care offerings – Digital Engagement and Bill Advisor. We now have an expanded product set that qualifies us to address an even wider variety of utility challenges.”
In light of these facts, Robbins LLP is examining Opower’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.
Opower 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.
Opower 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.