SANTA ANA, Calif. (CN) – Directors are selling Broadcom too cheaply through an unfair process to Avago Technologies, in a cash or stock deal valued at $37 billion, shareholders say in a class action in Orange County Court.
Shareholders will get $54.50 per Broadcom share, or 0.4378 shares of the newly formed Singapore holding company, according to the June 1 lawsuit. The companies announced the merger on May 28.
Their statement claimed the new company will have “$77 billion in enterprise value” and annual revenue of about $15 billion.
Lead plaintiff Zhemin Xu describes Irvine-based Broadcom as a “fabless” semiconductor company: a company that designs and sells electronic devices, but outsources its manufacturing.
Xu says Broadcom is worth $60 to $65 a share.
He is represented by Evan Smith with Brodsky & Smith, of Beverly Hills.
- Reality Bites
- Caveat Emptor