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.