QuarkVSInDesign.com Archive

The Following is Archived and Preserved from QuarkVSInDesign.com, 2003–2009.

Shareholder Sues Adobe Over Macromedia Acquisition

Adobe shareholder claims announcement to buy Macromedia breached fiduciary duty to shareholders.

Publish​.com re­ports that Adobe share­hold­er Steve Staehr filed suit in California Superior Court Monday against Adobe Systems, Inc., which an­nounced in April its in­tent to ac­quire ri­val Macromedia, Inc. Staehr al­leges that Adobe CEO Bruce Chizen and the Adobe board of di­rec­tors are in breach of fidu­cia­ry du­ty as a re­sult of the pro­posed ac­qui­si­tion an­nounce­ment. The an­nounce­ment, Stauher claims, led to a drop in Macromedia’s stock val­ue, thus di­min­ish­ing its val­ue to Adobe share­hold­ers, there­by harm­ing the share­hold­ers.

In a state­ment is­sued by Adobe, the San Jose, California tech­nol­o­gy com­pa­ny “be­lieves the com­plaint is with­out mer­it and in­tends to de­fend the mat­ter vig­or­ous­ly.”

“Sometimes a share­hold­er who sues dur­ing a merg­er has a le­git­i­mate com­plaint,” Florida at­tor­ney, Tracy Nichols, is quot­ed as say­ing in the Publish​.com ar­ti­cle. “But in my ex­pe­ri­ence, they’re usu­al­ly just try­ing to line their pock­ets.”

Earlier this month Adobe vol­un­tar­i­ly filed an amend­ed pre-merger no­ti­fi­ca­tion and re­port form un­der the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The re­fil­ing af­fords the US Department of Justice Antitrust Division more time to re­view and in­ves­ti­age the pro­posed merg­er. Adobe still an­tic­i­pates a suc­cess­ful trans­ac­tion in the Fall of 2005.

My Take (Editorial)

Staehr’s suit should be tak­en as a good omen.

Adobe and Macromedia have ahis­to­ry of liti­gious as­so­ci­a­tion. In 1994, when Adobe ac­quired Aldus, then own­er of Adobe Illustrator com­peti­tor, FreeHand, Macromedia squir­reled FreeHand out from un­der the merg­er through third-party deal­ings with the orig­i­nal own­er, Altsys. In 2000, the two cre­ative soft­ware mak­ers squared off over the sim­i­lar­i­ties of their ap­pli­ca­tion user in­ter­faces in what was dubbed the Look-And-Feel Wars. Users of Macromedia prod­ucts are still smart­ing over the changes that loss forced the tabbed palette in­ter­face of pro­grams like Flash, FreeHand, and DreamWeaver.

Adobe and MacroMedia (for­mer­ly MacroMind) have spent plen­ty of time sit­ting across the court­room from one an­oth­er. Now, on the eve of their hell-freezes-over merg­er, it will be a good team build­ing ex­er­cise for them to share a ta­ble against Staehr.

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