An investor in Airvana has filed a lawsuit in Delaware Chancery Court on behalf of current investors Airvana, Inc. (Public, NASDAQ:AIRV), who purchased the AIRV shares before December 18, 2009, over alleged breaches of fiduciary duty by the board of directors of Airvana.
According to the complaint the plaintiff alleges that Airvana, Inc is selling itself too cheaply and the board of directors breaches of fiduciary duty arising out of their attempt to sell Airvana, Inc. (Public, NASDAQ:AIRV) to 72 Mobile Holdings, LLC., owned by affiliates of S.A.C. Private Capital Group, LLC, GSO Capital Partners LP, Sankaty Advisors LLC and ZelnickMedia. The plaintiff argues that Airvana is victim of the tumultuous economy and the offer appears opportunistically timed to take advantage of this situation.

On December 18, 2009 Airvana, Inc. (NASDAQ: AIRV) announced that it has entered into a definitive agreement with a newly formed company to be owned by affiliates of S.A.C. Private Capital Group, LLC, GSO Capital Partners LP, Sankaty Advisors LLC and ZelnickMedia, in a transaction valued at approximately $530 million. Under the terms of the agreement, at closing, each share of Airvana common stock will be exchanged for $7.65 cash and certain members of management of Airvana, including Randy Battat, President and CEO, and founders Vedat Eyuboglu and Sanjeev Verma, will exchange a portion of their shares for an equity interest in the acquirer. Accoring to Airvana the transaction was unanimously approved on December 17, 2009 by Airvana's Board of Directors (other than Mr. Battat and Mr. Verma, who abstained) and the offer represents a premium of approximately 23% over the closing share price on December 17, 2009.

The plaintiff alleges that the board of directors of Airvana failed to ensure that the sharesholders will receive maximum value for their shares and that the board of directors fail to conduct an appropriate sale process. Shares of Airvana, Inc (AIRV) traded at $7.57 per share after the announcement and at $6.20 per share the day before the announcement. But the plaintiff alleges that the proposed transaction, is one-sided because it contains a

no solicitation” provision, a $15million termination fee provision, and will only benefit the insiders, but not the Airvana shareholders and the true value of Airvana’s stock is much greater than the consideration offered in the proposed transaction. The plaintiff claims the offer should be higher because the company introduced recently new/updated products, like the HubBub Connected Home Femtocell (a new model of the HubBub CDMA Femtocell), the financial results are promising, outstanding invoices of about $36.4million, and recent payment of $39.6million payment from Nortel.

Airvana, Inc., located in Chelmsford, MA, is a provider of network infrastructure products used by wireless operators to provide mobile broadband services. The Company’s technology and products, from femtocell solutions to core mobile network infrastructure, enable operators to deliver broadband services to mobile subscribers, wherever they are. Airvana, Inc reported in 2007 Total Revenue of $305.79million with a Net Income of $153.34million and in 2008 Total Revenue of $126.71million with a Net Income of $21.29million.