Robbins Arroyo LLP: Acquisition of Xura, Inc. (MESG) by Affiliates of Siris Capital Group, LLC May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Xura, Inc. (NASDAQ: XURA) by affiliates of Siris Capital Group, LLC. On May 23, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Siris Capital Group will acquire Xura. Under the terms of the agreement, Xura shareholders will receive $25.00 in cash for each share of Xura common stock.
Is the Proposed Acquisition Best for Xura and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Xura is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $25.00 merger consideration represents a premium of only 27.7% based on Xura’s one-week average unaffected closing price. This premium is significantly below the average one-week premium of nearly 90% for comparable transactions within the past five years. Further, the $25.00 merger consideration is significantly below the target price of $30.00 set by an analyst at Craig-Hallum Capital Group LLC on April 18, 2016, and the target price of $29.00 set by an analyst at Oppenheimer & Co. on April 15, 2016. In the last three years, Xura traded as high as $40.30 on January 21, 2014, and most recently traded above the merger consideration – at $25.78 – on January 5, 2016.
On April 15, 2016, Xura reported strong preliminary earnings results for its fourth quarter 2015. Total revenue for the quarter was $82 million, an increase of 28% compared to the same period last year. Adjusted EBITDA for the quarter was $14 million, an increase of 250% compared to the same period last year.
In light of these facts, Robbins Arroyo LLP is examining Xura’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.
Xura 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.
Xura 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.