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.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.