Ramius LLC is not happy about the sale of Zoran Corp. (Nasdaq: ZRAN) to CSR plc (LSE: CSR) in an all-stock merger, arguing that "the transaction may undervalue Zoran." It also questions whether "the sale was the result of a full and fair sale process to maximize value for all Zoran shareholders."
Zoran's share price soared 17.1% in early trading today, the day after the acquisition was announced, to $10.92, giving a market cap of $539 million. CSR is acquiring the company for $679 million.
Ramius unit Ramius Value and Opportunity Advisors LLC owns 9.3% of Zoran. It stands to receive CSR shares worth ₤36.5 million ($59 million), based on yesterday's share price. This is a handsome profit for Ramius, which bought its stake in Zoran for $34 million in late 2010.
Ramius Partner managing director Jeffrey Smith said, "We are suspicious that the announced merger with CSR may be yet another attempt by the current board of Zoran to usurp the will of the shareholders. To announce such a transaction just weeks before the completion of our consent solicitation to remove and replace a majority of the board appears to be a last ditch effort by the board to insulate itself from shareholder action seeking new representation. It also raises concern that the proposed transaction serves merely as a graceful exit for a poorly performing board with a 20-year average tenure instead of a transaction that maximizes value for shareholders."
Smith added, "It is now more important than ever that shareholders have new board members in place who understand their fiduciary responsibilities."
Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2011
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