Acquisition of Apigee Corporation (APIC) by Alphabet Inc.’s Google (GOOGL) May Not Be in Shareholders’ Best Interests
Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Apigee Corporation (NASDAQ: APIC) by Google (NASDAQ: GOOGL). On September 8, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Google will acquire Apigee. Under the terms of the agreement, Apigee shareholders will receive $17.40 for each share of Apigee common stock.
Is the Proposed Acquisition Best for Apigee and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Apigee is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $17.40 merger consideration represents a premium of only 6.5% based on Apigee’s closing price on September 7, 2016. This premium is significantly below the average one-day premium of nearly 41.89% for comparable transactions within the past three years. Further, the $17.40 merger consideration is significantly below the target price of $19.00 set by an analyst at JMP Securities on May 19, 2015, and the target price of $18.00 set analysts at Nomura and Pacific Crest Securities, on February 22, 2016 and June 1, 2016, respectively. In the last three years, Apigee traded above the merger consideration – at $20.50 – on April 24, 2015.
On May 25, 2016, Apigee reported strong earnings results for its third quarter 2016. Apigee reported total revenue of $23.5 million, a 36% increase from the same period of the prior year. Apigee has also beaten analyst estimates for revenue, adjusted net income, and adjusted earnings per share for the past four consecutive quarters. In commenting on these results, Apigee Chief Executive Office Chet Kapoor remarked, “We are pleased to deliver another solid quarter of revenue and billings growth, driving us closer to our goal of achieving positive operating cash flow by the quarter ending January 2017. We see our business benefitting from two key trends in enterprise IT – the ongoing adoption of digital business and the shift to cloud. Across both of these trends, APIs are a key enabler for quickly delivering customer value. With our growing customer base and expanding partner engagement, we believe Apigee is positioned to drive these trends.”
In light of these facts, Robbins Arroyo LLP is examining Apigee’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.
Apigee Shareholders Have Legal Options
Apigee 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. Apigee 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.