I’ve reported on Zoran Corp (ZRAN) here, here and here. The short story is that an activist investor, Ramius, was agitating for change and Zoran management agreed to merge with CSR plc in an all-stock transaction. March was a busy month for the three companies so let’s dive into the updates.
On March 8, ZRAN made an announcement that Ramius was successful in its proxy fight:
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
… Ramius Value and Opportunity Master Fund Ltd (“Ramius”) had delivered the requisite consents to elect three new independent directors to the Company’s Board of Directors in substitution for three of the Company’s current independent Board members. Chairman Uzia Galil and board members James D. Meindl and Philip M. Young, the three longest-serving Board members, have been replaced Jon S. Castor, Dale Fuller and Jeffrey C. Smith.
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Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On March 3, 2011, Ramius delivered the requisite number of consents to amend the Company’s Bylaws as set forth below:
Any provision of the Company’s Bylaws in effect on March 3, 2011, including any amendments thereto, which were not included in the Company’s Bylaws that became effective on April 22, 2009, was repealed. No amendment to the Company’s Bylaws were made after April 22, 2009, and, therefore, no provision was repealed.
Article IV, Section 19 of the Company’s Bylaws were amended to add the following to the end thereof: “Stockholders shall have the exclusive ability to fill any vacancies resulting from the removal of any Director(s) by the stockholders.”
Item 5.07. Submission of Matters to a Vote of Security Holders
On March 3, 2011, Ramius delivered to the Company the requisite number of written consents to effect the its proposals identified below. Under Delaware law, stockholders may act without a meeting, without prior notice and without a vote, if consents in writing setting forth the corporate action to be taken are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such corporate action at a meeting at which all shares entitled to vote thereon were present and voted, i.e., a majority of the outstanding voting power.
In addition to the amendments to the Company’s Bylaws described in Item 5.03 above, Ramius also delivered to the Company the requisite number of written consents to remove Uzia Galil, James D. Meindl and Philip M. Young from the Company’s Board of Directors and to elect Jon S. Castor, Dale Fuller and Jeffrey C. Smith to the Company’s Board of Directors. Brokers did not have discretionary voting authority on any of the proposals and, as a result, there could be no broker non-votes.
On March 28, ZRAN announced it had terminated early the 30-day waiting period applicable to the merger.
Zoran Corporation (NASDAQ: ZRAN) announced today that the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, applicable to Zoran’s proposed merger with CSR plc (LSE: CSR.L) , was terminated early on March 24, 2011. Completion of the transaction remains subject to other customary closing conditions, including approval by Zoran’s and CSR’s stockholders. Zoran anticipates that the transaction will be completed in the second quarter of 2011.
Throughout the month, ZRAN published a slew of documentation under Rule 425 regarding the merger. You can see them all here. The short story is that Ramius, despite being successful in its proxy fight, will be unsuccessful in stopping the merger or extracting any extra value from CSR.
From this filing:
What are the ramifications for the merge of the Ramius vs Zoran altercation currently being played out?
At the time of signing the definitive merger agreement with Zoran, CSR was aware of the Ramius consent solicitation and the possible changes in Zoran’s board of directors. CSR does not expect any material change in the business of Zoran as a result of the consent process. With that process now concluded, Zoran management will be able to focus on its customers, running the business, and taking the actions necessary to complete the merger between CSR and Zoran.
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There seems to be a large number of US law firms “investigating” the Zoran merger. Do we see this as an impediment to the merger?
It’s not uncommon for US law firms to file lawsuits following the announcement of a proposed acquisition of a US publicly-traded company. We do not see these lawsuits as an impediment that would block the merger.
From this filing:
Can you possibly give us an update on what the progress has been towards closing the deal? Is there any risks you see to that happening and how that’s playing out?
Sure. I’ll sort of talk generally about it, and then I’ll talk specifically about Ramius, which is probably, I think, what you’re alluding to, David, so in general, you know, the requirements or the conditions for closing are… you know, any (?) trust, which we don’t believe will be an issue, shareholder approval on both sides.
Now, Cynthia and I and Joep have been spending the last several weeks talking to a lot of our shareholders, both in the UK but also in the US. We’ve also spoken with many of the Zoran shareholders, and we believe that they definitely can see the strategic and financial attraction of the deal, so we’re quite confident that they will be supportive of the transaction. The… so again, the timetable would be to close some time probably in June, and we’re very much on track to do that, all the word being done, putting the all documentation together etc is very much on track.
Now, one of the things about… you know, what you’ve seen about this deal is there is an activist shareholders called Ramius, who in about November bought shares in Zoran, and I think in December began a consent solicitation to change. They were looking to change six out of seven board members at Zoran. They won that solicitation, or they partially won that, again, I think, last week, where they ended up changing three out of the seven Zoran board members so, again, our view on that, which I think we sort of… we issued a press release earlier this week on this, is that something that clearly was part of our thinking, as we were thinking about this deal we were obviously well aware that was happening, so it’s not something that comes as anything of a surprise to us.
We would… you know, the… we expect to continue working with the Zoran board sort of as it was and don’t expect that to be really any different than it has been, and we would again continue to expect to close. We have a very sort of clear, and we believe, a strong legal agreement, i.e. the merger agreement is, you know, clearly in place, and frankly we think the transaction is compelling both for our shareholders and for those of Zoran, so we expect to continue… we continue to expect to close in June.
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And then secondly, on the change in the board structure at Zoran, what can… the number of the three directors appointed, what capacity do they have to be disruptive?
Well, open question to the imagination (?) I guess. No, I think at the end of the day the… what they will… I can’t really speak for them, right, but the board of Zoran needs to act both within their obligations and within… for the best interest of their shareholders, right?Now, the obligations that they have in the merger agreement which has been filed are pretty clear, right, and we have a signed agreement, and there really… there’s very little opportunity for that to change in the absence of a higher offer, right, and if there were a higher offer obviously that changes the situation and we will… you know, we’ll look at that when it comes, right, but in terms of other ways that they can be disruptive, I mean, you’d have to… I totally expect them to act within the guidelines of the deal, which is what they’ve said, right, so that’s what I expect to happen here.
One more interesting thing to note is that Starboard Value LP, a hedge fund spun out of Ramius, acquired 872,500 call options on ZRAN in early April (unless I am misreading the filings here and here).
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