An investor in NASDAQ:SRSL shares filed a lawsuit against directors of SRS Labs, Inc. in effort to block the proposed takeover of SRS Labs, Inc.by DTS, Inc. at a value of $9.50 per NASDAQ:SRSL share.
Investors who purchased shares of SRS Labs, Inc. (NASDAQ:SRSL) prior to April 17, 2012 and currently hold any of those NASDAQ: SRSL shares have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 – 1554.
The plaintiff alleges the defendants breached their fiducary duties owed to NASDAQ:SRSL stockholders arising out of the attempt to sell SRS Labs, Inc. to DTS, Inc via an unfair price and unfair process.
On April 17, 2012, SRS Labs, Inc. and DTS, Inc. announced that they have entered into an agreement under which DTS will acquire all outstanding shares of SRS Labs in a cash-and-stock transaction valued at $9.50 per share, or a total of approximately $148 million in aggregate equity value, including acquired net cash of approximately $38 million as of December 31, 2011.
However, the plaintiff alleges that the offer by DTS, Inc is fundamentally unfair and undervalues NASDAQ:SRSL shares. In fact, NASDAQ:SRSL shares traded in July 2011 as high as $9.95 per share, thus above the current offer. In addition, at least one analyst has set the high target price for NASDAQ:SRSL shares at $10.00 per share.
Furthermore, the plaintiff claims that the proposed transaction fails to reflect SRS Labs’ prospects for long-term growth. In fact, SRS Labs’ financial performance improved over the past years. Its annual Revenue rose from $18.33million in 2008 to $32.87million in 2011 and its Net Income rose from $0.27million in ’08 to $1.12million.
In addition, the plaintiff alleges that the process is unfair to NASDAQ:SRSL shareholders. Indeed, Thomas C.K. Yuen, SRS Labs’ chairman, CEO and president, and certain of his family members and affiliates, who together hold approximately 20% of the outstanding SRS Labs shares, have already entered into a Voting Agreement with DTS pursuant to which they have committed to vote all of the shares of SRS Labs common stock held by them in favor of the proposed transaction.
Additionally, the plaintiff claims that the defendants agreed to several deal protection devises, such as a no solicitation and a $7.5million termination fee provision, that ensure that no alternative buyers will emerge with a superior offer.
Those who are current investors in SRS Labs, Inc. (NASDAQ:SRSL) and purchased their NASDAQ:SRSL shares prior to the announcement, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North – Suite 423
92108 San Diego