Robbins Arroyo LLP is investigating the acquisition of rue21, inc. (NASDAQ: RUE) by funds advised by the private equity firm Apax Partners.  On May 23, 2013, the companies announced the signing of a definitive merger agreement under which Apax Partners will acquire all outstanding shares of rue21 for $42 per share in cash.  Robbins Arroyo LLP’s investigation concerns, among other things, whether the merger was motivated by any improper conflicts of interest since Apax Partners is already rue21′s largest shareholder and two principals of Apax Partners sit on rue21′s board of directors, including John F. Megrue, Jr. and Alex Pellegrini.

Is the Acquisition in the Best Interests of rue21 and Its Shareholders?

Robbins Arroyo LLP’s investigation focuses on whether the board of directors at rue21 is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.

On March 21, 2013, rue21 released its fourth quarter and fiscal year 2012 financial results reflecting strong growth in net sales, adjusted net income, and adjusted earnings per share.  Specifically, rue21 reported an increase in net sales of over 22% for the fourth quarter and over 18% for the full year, compared to the same periods in 2011.  Adjusted net income for the fourth quarter increased by over 22% and by nearly 20% for the full year, compared to the same periods in 2011.  Adjusted earnings per share for the fourth quarter were $0.65 compared to $0.52 for the fourth quarter 2011 and $1.87 in fiscal 2012 compared to $1.55 in fiscal 2011.  Further demonstrating the company’s sustained economic performance and stellar business prospects, rue21 exceeded analyst earnings per share and net income expectations in the past nine quarters.

In announcing rue21′s financial results, Robert N. Fisch, the company’s President and Chief Executive Officer, touted that “Fiscal 2012 was another year of consistent top and bottom line growth for rue21, including gross margin and double-digit growth in net income.  We continue to focus on the qualities that make rue21 appealing to our customers and our financial returns attractive to our shareholders….”

Given these facts, Robbins Arroyo LLP is examining the board of directors’ decision to sell rue21 now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.

Shareholders of rue21 have the option to file a class action lawsuit to secure the best possible price for themselves and the disclosure of material information so that they can vote on the transaction in an informed manner.  Shareholders of rue21 interested in information about their rights and potential remedies can contact Darnell R. Donahue at (800) 350-6003 or you can complete the form below and we will contact you directly.

Shareholder Information

Robbins Arroyo LLP are investigating the acquisition of Multiband Corporation (NASDAQ: MBND) by Goodman Networks Incorporated. On May 22, 2013, the two companies announced the signing of a definitive merger agreement whereby Goodman Networks will acquire Multiband for $3.25 in cash for each Multiband share.

Is the Acquisition Best for Multiband and Its Shareholders?

Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Multiband is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger or whether they are seeking to benefit themselves.

On May 15, 2013, Multiband released its first quarter 2013 financial results reflecting strong growth in the company’s WildBlue internet service, Multi-Dwelling Unit (“MDU”) segment, and Energy, Engineering & Construction (“EE&C”) segment. Specifically, Multiband reported first quarter WildBlue internet service revenue increased by 273%, or $2.5 million, to $3.4 million in the quarter. Further, Multiband reported that its MDU system operator revenues increased 21.8%. Moreover, Multiband reported that its EE&C segment revenues increased by 19.9%, with, CEO James L. Mandel, commenting that, “we expect revenues in this segment to increase throughout the remainder of 2013 as we increase our sales activity and footprint.”

In addition, the $3.25 offer price is below the target price of multiple analysts, including a $4 target price set by an analyst at Craig-Hallum on August 15, 2012, and a target price of $3.50 set by an analyst at Northland Securities on November 15, 2012. Moreover, Multiband has traded above the offer price as recently as March 27, 2012, reaching a high of $3.38.

Given these facts, the firm is examining the board of directors’ decision to sell Multiband now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.

Multiband shareholders have the option to file a class action lawsuit to secure the best possible price for shareholders and the disclosure of material information so shareholders can vote on the transaction in an informed manner.

Multiband shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.

Shareholder Information

As featured on Law360 on May 20, 2013:

Stephen J. Oddo is a partner in Robbins Arroyo LLP’s San Diego office and leader of the firm’s corporate merger and acquisition practice. He has represented individual and institutional shareholders in corporate merger and acquisition class actions for more than a decade. Prior to joining Robbins Arroyo, Oddo was a partner at the firm now known as Robbins Geller Rudman & Dowd LLP, as well as press secretary to U.S. Representative Robert T. Matsui, D-Cal.

Q: What is the most challenging case you have worked on and what made it challenging?

A: One case that comes to mind is a securities class action involving Electronic Data Systems (EDS), which was a Texas-based IT company to be acquired by Hewlett-Packard. I represented EDS shareholders who challenged the acquisition, seeking a fair process and price in the purchase. The case moved very quickly and was not without hurdles.

Discovery was taken on an expedited basis, including the review of thousands of pages of documents and numerous depositions, and a preliminary injunction motion was fully briefed, all in the condensed time frame of four weeks. At the hearing on the motion to enjoin the transaction, we were ready to provide a markup of the proxy statement that included all of the previously omitted material information we had learned about through discovery, along with the expert testimony of several witnesses.

At 4 a.m. in the morning on the day of the preliminary injunction hearing, just four hours before the hearing, we were able to negotiate a preclosing settlement that secured the disclosure of the additional information concerning the transaction that we had identified in the markup of the proxy, allowing for an informed shareholder vote, and the payment of a $25 million dividend to EDS shareholders. This was a challenging litigation, not only because of the expedited nature of the litigation, but also because of the sheer number of counsel involved on both sides and the stakes of trying to enjoin a $14 billion transaction.

Q: What aspects of your practice area are in need of reform and why?

A: I’m not sure there are areas that need reform, but certainly the most discussed issue in my area of practice right now is the multijurisdictional trend in shareholder merger litigation that sees actions challenging a merger brought in as many as three different venues: the state court in the state of the target company’s incorporation, which many times is Delaware; the state court in the state of the target’s headquarters; and federal court. There are strong rationales for filing cases in each of those venues, but when cases are filed in all three venues, there is a risk of duplication of efforts and wasted resources. Better coordination among plaintiffs’ counsel could help alleviate that problem and, for the most part, I think the plaintiffs’ bar is moving in that direction.

Q: What is an important issue or case relevant to your practice area and why?

A: In a recent Delaware Court of Chancery decision (In re El Paso Corporation Shareholder Litigation), the court refused to enjoin a pending merger despite finding that the CEO of the seller and its financial advisers were clearly conflicted and had failed to obtain the best possible price for their shareholders. In that case, the CEO of the target company was seeking to acquire a division of the business following the merger and as a result, was not motivated to strongly negotiate with the buyer. In addition, the seller’s financial adviser held a substantial equity interest in the buyer and therefore was motivated to steer the target company’s board of directors toward a merger between the parties.

Despite these significant conflicts of interest and the grossly inadequate sale process, the court denied plaintiffs’ motion for a preliminary injunction concluding that the shareholders should have the opportunity to decide whether to approve the merger. This case illustrates the reluctance of courts to enjoin mergers of public companies, even where, as in this case, there is an extreme set of facts showing that the sales process and price were patently unfair. It is important for plaintiffs in class action suits challenging proposed mergers to keep this case in mind in deciding whether, and on what grounds, to bring a preliminary injunction motion.

Q: Outside your own firm, name an attorney in your field who has impressed you and explain why.

A: We regularly go up against some of the best securities litigators in the country — lawyers from top law schools with years of experience in this field — so I have the challenge to litigate against strong legal talent on a daily basis. A few attorneys who come to mind include Bill Savitt at Wachtell, Eric Waxman and Ed Welch at Skadden, and Jim Kramer at Orrick. They each have their own styles, but the common threads among them are they demonstrate a tremendous grasp of the legal issues involved, exhaustive preparation and a strong sense of pragmatism, qualities which make them all worthy adversaries.

Q: What is a mistake you made early in your career and what did you learn from it?

A: When I first graduated from law school, I decided to not practice law directly and instead tried my hand at being a sports agent. My partner and I mortgaged our futures (literally) to set up a nice office and to be able to fly around to the far corners of the country to recruit athletes to represent in contract and endorsement negotiations. Our theory was that we had to look like we could play the part of the big-time sports agent. In reality, because we were just starting out, we could have worked out of a basement and it really wouldn’t have mattered. What we learned was that most of the athletes we were recruiting didn’t care about the fancy offices — what they cared about was the personal attention they demanded from their representatives. It was an expensive, although valuable, lesson to learn.

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Robbins Arroyo LLP announces that a purchaser of Amyris, Inc. (NASDAQ: AMRS) securities has filed a complaint in the U.S. District Court for the Northern District of California.  The complaint alleges that Amyris and certain of its officers and directors violated the Securities Exchange Act of 1934 between April 29, 2011 and February 8, 2012 (the “Class Period”).  Amyris is a renewable products company that produces various alternatives to a range of petroleum-sourced products for the specialty chemical and transportation fuel markets worldwide.

Amyris Is Accused of Making False and Misleading Statements Regarding Its Ability to Sustain Commercial Production of Biofene

The complaint alleges that during the Class Period, Amyris and its President and CEO issued a series of materially false and misleading statements concerning the true nature of the company’s operations and prospects.  On April 29, 2011, according to the complaint, the company announced that it had designed a facility capable of the sustained commercial production of Biofene.  Then on May 5, 2011, the company indicated that it expected to produce 6 million to 9 million liters of Biofene in 2011 and an additional 40 million to 50 million liters in 2012.  According to the complaint, those statements were false and misleading because the scalability of the company’s production to commercial levels was unsuccessful, and the company’s representations regarding their ability to achieve the expected production capacities had no basis in fact.

Amyris Stock Price Falls Dramatically on the Announcement of Reduced Production Capabilities

On November 1, 2011, Amyris reported that it lacked the ability to produce the volume of Biofene that it previously projected, and was reducing its production projections dramatically.  On this news, the company’s stock price dropped 20% to close at $15.47 per share on November 2, 2011.  On February 9, 2012, the company announced that it was having additional problems producing Biofene at commercially viable levels and that the previously estimated 40 million to 50 million liters of Biofene for 2012 were being scrapped.  Moreover, the company reported that it was no longer anticipating positive cash flow from operations in 2012.  As a result of this news, the company’s stock price dropped 28%, or $2.74 per share, to close at $6.99 per share.

If you purchased or otherwise acquired Amyris stock during the Class Period and wish to serve as lead plaintiff, you must act no later than July 15, 2013.  To discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003 or you can complete the form below and we will contact you directly.

Shareholder Information

Robbins Arroyo LLP is investigating the acquisition of Websense, Inc. (NASDAQ: WBSN) by the private equity firm Vista Equity Partners.  On May 20, 2013, Websense announced the signing of a definitive merger agreement under which Vista Equity Partners will acquire Websense for $24.75 per share of common stock in cash.

The Board of Directors’ Actions May Prevent Websense Shareholders from Receiving Maximum Value for Their Stock

Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Websense is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.

On April 25, 2013, Websense released its first quarter 2013 financial results reflecting record billings and the continued strength of the company’s TRITON® solutions.  Specifically, Websense reported record first quarter billings of $81.8 million, and TRITON solutions billings of $54.7 million, an increase of 11.6% compared to the first quarter of 2012.  Further, Websense exceeded analyst earnings per share and net income expectations for the quarter, and in seven of the previous nine quarters while exceeding analyst sales expectations in the past three consecutive quarters and in six of the previous nine quarters. Moreover, the company reported a 19% increase in the number of transactions over $100,000.

In announcing the results, Websense Chief Executive Officer John McCormack commented, “This demonstrates the strength of our core business and the appeal of TRITON to our larger enterprise target customers.  Our recent sales expansion is already showing benefits with an increased sales pipeline for the second quarter and the rest of the year.  We remain confident in our ability to execute successfully on the growing market opportunity for advanced security solutions, and to deliver sustained and profitable billings growth.”

Given these facts, the firm is examining the board of directors’ decision to sell Websense now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.

Websense shareholders have the option to file a class action lawsuit to secure the best possible price for shareholders and the disclosure of material information so shareholders can vote on the transaction in an informed manner.  Websense shareholders interested in information about their rights and potential remedies can contact Darnell R. Donahue at (800) 350-6003 or you can complete the form below and we will contact you directly.

Shareholder Information