Cable television set-top box maker Scientific-Atlanta Inc on Wednesday said it and its directors have been named in two lawsuits related to its $6.9 billion agreement to be bought by Cisco Systems Inc.
The complaints, which accuse Scientific-Atlanta and its directors of breaching their duties to shareholders in agreeing to an "inadequate price" for the sale, are "without merit," the company said.
The lawsuits were filed on Tuesday and Wednesday in the State Court of Fulton County, Georgia, Scientific-Atlanta spokesman Tom Robey said.
Scientific-Atlanta said its board undertook a "thorough and deliberative process to obtain the best transaction at the highest price available."
It said the proxy statement it plans to file with the US Securities and Exchange Commission will detail the process and the fairness opinions it obtained from three investment banks.
One of the lawsuits was filed by Kalford C. Fadem, listed in the document as a Scientific-Atlanta shareholder. The size of Fadem's stake in Scientific-Atlanta was not mentioned in the lawsuit, which was obtained by Reuters.
"This price... represents nowhere near the true value of the company's shares, particularly in light of the company's current financial condition and future prospects," the lawsuit states.
Plaintiff's lawyers listed in the lawsuit did not return telephone calls seeking comment.
Cisco agreed to pay $43 per share for Scientific-Atlanta, a 3.7 percent premium to where the shares closed before the deal was announced and above the sub-$36 per-share level at which they traded early this month before rumours of a possible deal surfaced.
Internet equipment company Cisco said last Friday that it would buy Scientific-Atlanta to gain more traction in the home entertainment market, marking the second-largest purchase in Cisco's history.
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