Acer made a surprise move in late August when it announced its
intentions to purchase U.S.-based Gateway, Inc. The deal was valued at $710
million USD and was crucial in helping Acer get a stranglehold on the U.S.
market. Gateway is currently the fourth largest PC manufacturer in the U.S.,
while Acer is the third largest PC manufacturer in the world.
"The acquisition of Gateway and its strong brand
immediately completes Acer's global footprint, by strengthening our US
presence," said Acer chairman J.T. Wang at the time of the announcement.
"Acer has made impressive strides in the global PC
market and the board and I welcome this merger," added Gateway CEO Ed
All is not roses, however, when it comes to the merger.
Shareholders in two
are claiming that Gateway was worth well more than the $710 million USD price
tag that was agreed upon. The shareholders note that Gateway had a fiduciary
responsibility to its shareholders and was not putting its shareholders
interests in mind when it agreed to the acquisition.
"The Company’s directors breached their fiduciary
duties to stockholders by approving the Merger Agreement and the transactions
contemplated thereby, including but not limited to the Offer, and claims that
these transactions are both unfair and coercive to the public stockholders in a
sale of the Company," the lawsuit claims.
The lawsuit goes even further to indicate that "The
Company’s directors breached their fiduciary duties by failing to include
certain information in the Schedule 14D-9, which purportedly denies the
stockholders a fully informed voluntary choice whether to approve the Merger
Agreement or seek appraisal."
It is not known what price shareholders would have been
content with concerning the Gateway purchase, but John
Hui offered just $450 million USD for Gateway's retail division in August
2006. Gateway rejected the offer.
Wang Jen-tang, Acer's chairman and CEO, has even noted that
its investors and some market analysts indicated that the $710 million price
tag may have been too much. "Regarding the criticism that the price is too
high, I think whether a price is high depends on whether the buyer will in the
end be able to realize synergies," said Jen-tang to the Financial Times. "If he is able
to do that, then it is not high. If he can't realize the synergies, then it's a
very high price."
Shareholders may also be smarting over Gateway's priority
position when it comes to Packard Bell. Gateway
has the right of first refusal (ROFR) for complete control of PB Holding
Company, S.ar.l -- thus gaining complete control of Packard Bell. Gateway
acquired the ROFR in June 2006 from Hui.
Jen-tang plans to exercise the right and is already
discussing Acer's plans for Packard Bell.