Varjabedian v. Emulex Corporation
United States Court of Appeals for the Ninth Circuit
888 F.3d 399 (2018)
Avago Technologies' subsidiary made a tender offer to buy Emulex Corp. (defendant) stock at $8 per share, a 26.4% premium; Emulex hired Goldman Sachs, whose analysis produced a chart showing this premium was within the normal range but below average compared to 17 similar recent semiconductor transactions. Emulex omitted this chart from its Schedule 14D-9 recommendation statement filed with the SEC. Shareholders led by Gary Varjabedian and Jerry Mutza (plaintiffs) sued, claiming $8 was too low and that omitting the chart misled shareholders under the Williams Act; the trial court, relying on other circuits' precedent requiring intentional deception, dismissed the § 14(e) claims because Mutza hadn't pleaded that Emulex deliberately excluded the chart, and the shareholders appealed.
Whether, unlike five other circuits, the Ninth Circuit recognizes that negligent failure to disclose information material to a tender offer violates § 14(e) of the Williams Act, without showing intent to mislead shareholders.