Shiva has offered to settle the shareholder lawsuit that threatened its proposed $185 million acquisition by chip giant Intel.
Under the terms of the deal, the shareholders will receive $6 per share and Shiva expects them to vote in favour of the bid on 26 February.
Shareholders had claimed that the vendor had failed to disclose its restated financial figures, restated after Intel made its bid and which boosted its results. As a result, the shareholders said they have not received the full payout due to them.
Shiva, which detailed its financial information in a supplementary statement filed with the Securities and Exchange Commission (SEC) last week, argued that the gain, which included $32.4 million related to the acquisition of Isolation Systems in the first quarter of 1998, was temporary and its balance sheet would be hit by $10 million a year for the next three years.
The restatement reduced Shiva's net loss for the nine months ended 3 October 1998, to $12.1 million from $30.5 million. Net losses per share were reduced to $0.40 from $1.01.
In the SEC filing, Shiva also revealed details of its discussions with other suitors, which stockholders had also complained were not made public.
The supplier claimed it looked at other potential suitors prior to and after Intel first indicated its interest in the acquisition, but the lawsuit suggested stockholders were kept in the dark about this.
Shiva has admitted that its financial advisers, Lazard Freres, contacted 13 potential suitors, including 'leading companies in the networking industry', but failed to win any interest.
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