Minnesota man brings suit against Hutchinson to prevent merger

By Robbie Hargett | Dec 8, 2015

MINNEAPOLIS (Legal Newsline) – A Minnesota man is suing Hutchinson Technology and members of its board of directors to prevent its proposed merger with Hydra Merger Sub.

David Erickson, individually and for all others similarly situated, filed a class action lawsuit Nov. 30 in the U.S. District Court for the District of Minnesota against Hutchinson Technology, et al., alleging violations of the Securities Exchange Act.

Hutchinson Technology manufactures and supplies suspension assemblies for hard disk drives.

Erickson and others in the class own Hutchinson common stock.

The suit states Hutchinson filed a materially incomplete and misleading preliminary proxy statement with the U.S. Securities and Exchange Commission. The proxy recommends Hutchinson shareholders vote in favor of the company's proposed merger with Hydra Merger Sub, whereby Hutchinson would become a wholly owned subsidiary of Headway Technologies.

Under the merger's terms, Hutchinson shareholders stand to receive $3.62 per share and up to an additional 38 cents under certain circumstances.

However, the suit states the merger consideration is unfair to shareholders because it contains materially incomplete and misleading information concerning financial analyses conducted by Bank of America Merrill Lynch, Hutchinson's financial adviser. The suit claims these analyses undervalue Hutchinson, so shareholders would be supporting the proposed transaction in exchange for inadequate considerations.

Erickson and others in the class seek an order enjoining Hutchinson from filing a definitive proxy with the SEC and enjoining the consummation of the proposed transaction, plus damages, attorney fees, and other costs of the suit. They are represented by attorneys Renae D. Steiner and James W. Anderson of Heins Mills & Olson in Minneapolis, and by attorneys Juan E. Monteverde and Miles D. Schreiner of Faruqi & Faruqi in New York City.

U.S. District Court for the District of Minnesota Case number 15-CV-04261-DSD-LIB

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