Stockholder Files Suit over Jive Software Merger

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A stockholder has filed a proposed class action against Jive Software, Inc., its board of directors, and two companies attempting to close a merger with Jive and their subsidiaries. According to the suit, Aurea, Inc. and ESW Capital, LLC have entered into a merger agreement with Jive’s board of directors, but stockholders claim they have been unlawfully denied material information regarding the merger. The complaint cites the company’s allegedly record-breaking financial results for 2016 and points to these results as proof that Jive was undervalued in the merger agreement. The suit claims that Jive’s CEO also declared that the company was “strategically poised for success” in 2017.

The plaintiff claims the “solicitation statement” released to the public is missing information, rendering it “misleading.” Included in the undisclosed information were the details of the company’s financial projections and figures used in the analyses performed by its financial advisor, the suit claims. According to the complaint:

“[W]hen a banker’s endorsement of the fairness of a transaction is touted to stockholders, the valuation methods used to arrive at that opinion as well as the key inputs and range of ultimate values generated by those analyses must also be fairly disclosed.”

The suit further argues that the defendants failed to note whether potential bidders were permitted to make “superior offers” to acquire Jive. This and the aforementioned nondisclosures have caused stockholders to suffer “irreparable harm,” the complaint says.