Next Level Rejects Motorola Bid - Multichannel

Next Level Rejects Motorola Bid

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To say Next Level Communications' board of directors didn't react favorably
to an unsolicited tender offer from part-owner Motorola Inc. is a bit of an
understatement.

The Rohnert Park, Calif.-based digital-subscriber-line video- and data-system
provider announced Tuesday that its board has rejected Motorola's
$1.04-per-share bid for the company as inadequate, and it has filed suit in
Delaware to stop it.

Not only was Motorola's bid to acquire the remaining Next Level shares it
doesn't already own inadequate, but its attempt to push out minority
stockholders is unfair, according to a company release.

The board's recommendation for stockholders to reject the offer was based on
input from an independent committee set up to review the offer.

"We believe Motorola is attempting to coerce Next Level minority stockholders
into accepting an inadequate offer that significantly undervalues the long-term
potential of Next Level," according to the independent committee's statement.
"We do not support an inadequate offer and a process that is unfair to our
minority stockholders."

Furthermore, the company and stockholders Next Level Partners LLC and Spencer
Segura have filed suit against Motorola in Delaware's Court of Chancery seeking
to block the tender offer and to force Motorola to pay "substantial damages" to
Next Level.

Among other things, the suit claimed that Motorola violated confidentiality,
using insider information in creating its offer.

It also claimed that the Motorola offer was coercive because there has been
no commitment from Motorola to buy shares not tendered in a second-step
short-form merger, and Motorola has threatened to not support Next Level if its
bid is not accepted.

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