After Conexant Systems, Inc. announced that its board members agreed to a buyout of Conexant Systems, Inc. by SMSC an investigation on behalf of investors in Conexant Systems, Inc. (NASDAQ:CNXT) questions whether the offer and the sale process are unfair to CNXT investors.

The investigation by a law firm concerns whether certain officers and directors at Conexant Systems, Inc. breached their fiduciary duty owed to the shareholders of Conexant Systems, Inc. (NASDAQ:CNXT) arising out of their attempt to sell Conexant Systems to SMSC.

On Monday, Jan. 10, 2011, Conexant Systems, Inc. (NASDAQ: CNXT) and SMSC (NASDAQ: SMSC) announced the signing of an agreement under which SMSC will purchase all of the outstanding shares of Conexant Systems, Inc in a stock and cash transaction valued at approximately $284 million including the assumption of Conexant's net debt. Under the terms of the agreement, for each share of Conexant Systems, Inc that they own, Conexant Systems (CNTX) stockholders will receive approximately $2.25 consisting of $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock. The offer price represents a 19% premium to Conexants Friday closing price of $1.89 a share.

But shares of Conexant Systems, Inc. traded in July 2010 at $2.45 thus succeeding the current offer and as high as $4.09 in April 2010 and $5.03 in February 2010, thus leaving CNXT with no premium but providing SMSC a discount.

Therefore the investigation seeks to determine whether Conexant Systems, Inc. and certain of its officers and directors breached their fiduciary duties owed to Conexant Systems, Inc. (NASDAQ:CNXT) investors by rushing into the transaction and failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Conexant Systems (CNXT), specifically by entering into any transaction before adequately shop the Company. Additionally Conexant Systems, Inc. performed well in the past for its shareholders. Conexant Systems 52week Total Revenue ranged over the past four filing periods between $208.43million and $360.70million. Its Net Income rose over the same time frame from a substantial Net Loss of $402.46million to a Net Income of $20.23million. Thus a potential class action lawsuit would seek to maximize the amount of money and information CNXT shareholders would receive in a buyout, so the law firm.