Robbins LLP: Acquisition of RealD, Inc. (RLD) by Rizvi Traverse Management LLC May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of RealD, Inc. (NYSE: RLD) by Rizvi Traverse Management. On November 9, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Rizvi will acquire RealD. Under the terms of the agreement, RealD shareholders will receive $11.00 for each share of RealD common stock.
Is the Proposed Acquisition Best for RealD and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at RealD is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $11.00 merger consideration represents a premium of only 18.7% based on RealD’s closing price on October 1, 2014, the last unaffected trading day prior to the announcement from Starboard Value LP of its non-binding indication of interest to purchase all outstanding shares of RealD’s common stock. This premium is significantly below the average one-day premium of nearly 43.2% for comparable transactions within the past three years. Further, the $11.00 merger consideration is significantly below the target price of $15.00 set by an analyst at Piper Jaffray on June 4, 2014, and $13.75 set by an analyst at B Riley & Co. on August 6, 2014. In the last three years, RealD traded as high as $16.05 on June 7, 2013, and most recently traded above the merger consideration – at $11.15 – on August 6, 2015.
In light of these facts, Robbins LLP is examining RealD’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.
RealD 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.
RealD 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.