Electro Rent rents, leases, and sells new and used electronic test and measurement ("T&M") equipment primarily for use in the aerospace and defense, telecommunications, electronics, industrial, and semiconductor markets. The Company operates through two segments, T&M and data products. Its equipment portfolio includes general purpose T&M instruments, personal computers, workstations, tablets, and servers.
The complaint alleges that Electro Rent, the Board and Platinum breached their duties, and/or aided and abetted such breaches, in connection with their attempt to consummate the Proposed Transaction pursuant to an unfair process and for an unfair price. In addition, the complaint alleges Electro Rent and the Board disseminated a false and misleading Proxy Statement on Schedule 14A (the "Proxy") in violation of §14(a) of the 1934 Act and Rule 14a-9 promulgated thereunder in connection with the Proposed Transaction.
On May 31, 2016, Electro Rent and Platinum entered into a definitive agreement (the "Merger Agreement") that would culminate in Platinum, through Merger Sub 1 and Merger Sub 2, acquiring all of the outstanding shares of Electro Rent. Under the terms of the Merger Agreement, Electro Rent public stockholders would have received $13.12 in cash for every share of Electro common stock held, for an approximate aggregate value of $323.4 million. Thereafter, on June 7, 2016, defendants caused the Proxy to be filed with the SEC. Plaintiff's complaint was filed on June 20, 2016. On June 23, 2016, Electro Rent and Platinum entered into a Restated Merger Agreement (the "Restated Merger Agreement"). Under the terms of the Restated Merger Agreement, Electro Rent public stockholders will receive $15.50 in cash for every share of Electro Rent common stock held. On July 7, 2016, the Company filed its Definitive Proxy with the SEC and disseminated it in connection with a scheduled August 5, 2016 shareholder vote on the Proposed Transaction.
The complaint alleges the Proxy contains a number of false and misleading statements that are material to shareholders who are expected to rely on the Proxy to determine whether to approve the Proposed Transaction. The Proxy omits a number of material facts necessary to make statements made therein not false and misleading, including the events leading to the Merger Agreement, the analyses conducted by the Board's financial advisor, and Electro Rent's prospective financial information.
Plaintiff seeks injunctive and equitable relief on behalf of all Electro Rent shareholders. The plaintiff is represented by Brodsky & Smith, LLC, which has litigated hundreds of stockholder class and derivative actions for violations of corporate and fiduciary duties. Please visit http://brodsky-smith.com/1082-elrc-electro-rent-corporation.html for more information.
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SOURCE Brodsky & Smith, LLC