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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