Oclaro Facing Securities Lawsuit Over Potential Merger with Lumentum Holdings

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An investor has filed suit against Oclaro, Inc. and its board of directors alleging the company violated securities law by failing to provide stockholders with material information regarding a proposed merger with Lumentum Holdings Inc. The case claims the defendants filed a misleading registration statement in connection with the potential transaction that omitted information concerning Oclaro’s financial projections and the background of the sale.

In particular, the suit argues that the statement neglected to disclose “assumptions and key factors” underlying management’s projections of Oclaro’s future growth necessary for stockholders to determine whether the proposed deal was fair.

Additionally, the plaintiff notes that Oclaro entered into several non-disclosure agreements with other potential buyers and indicated in the registration statement that only one of the agreements did not contain a standstill provisions—a contract that governs how a bidder can purchase, dispose of, or vote stock for a target company—while remaining silent regarding the other two. The lawsuit claims stockholders would be interested in this information, as a standstill provision would have precluded the other parties from submitting superior offers for the company.