Investigation into takeover of ‘undervalued’ Cvent
The takeover of event-management software developer Cvent is under investigation over potential wrongdoing.
Cvent, which develops software for event planners, including solutions for online event registration, venue selection and event marketing, was acquired by private-equity firm Vista Equity Partners on 18 April for US$30 per share, or about US$1.65 billion.
Cvent stockholders will receive $36.00 in cash per share.
Many market analysts see this figure as being too low – one predicted a high target price for Cvent stock (CVT) of $43 per share, and Cvent shares traded in the open market as high as $37.25 per share on 8 December 2015 – leading one law firm to launch a formal investigation into whether the offer from Vista gives Cvent shareholders a fair return.
The investigation will centre on the unnamed law firm will investigate whether Cvent’s board maximised shareholder value by negotiating the best price and acted in the shareholders’ best interests in connection with the proposed sale
More specifically, the unnamed law firm will investigate whether Cvent’s board of directors undertook “an adequate sales process, adequately shopped the company before entering into the transaction, maximised shareholder value by negotiating the best price and acted in the shareholders’ best interests in connection with the proposed sale”.
The $36 offered is, however, a 69 per cent premium over the company’s closing price of $21.30 on the trading day prior to the acquisition, Friday 15 April.
Earlier this week Cvent CEO Reggie Aggarwal said his company stood to benefit greatly from the acquisition. “With Vista’s financial strength to invest in Cvent now and in the future, we will be better positioned to deliver innovative solutions that transform the meetings and events industry, and to offer employees new opportunities for career growth,” he commented.