After a media report stated that Informatica Corporation might be a takeover target by Oracle an investigation for investors of Informatica Corporation (NASDAQ:INFA) over possible breaches of fiduciary duty in the event of an unfair buyout was announced.

The investigation by a law firm concerns whether certain directors and officers at Informatica Corporation (NASDAQ:INFA) will breach their fiduciary duties in the event of a takeover. A media report on Dec. 23 said that Informatica Corp (INFA) may be on top of the list of Oracle Corps takeover targets. The media report speculated that buying Informatica would move Oracle into data integration, an area where it currently has no presence. Citing an unnamed industry analyst that 'Informatica is the only third party vendor that is on Oracle's price list' the media report said Oracle already resells Informatica's software to its clients, who require data integration programs for combing through vast databases and pulling out relevant pieces of information.
Richard Davis, a software analyst at Canaccord Genuity, said that Informatica's enterprise value is 20.1 times expected 2011 earnings before interest, taxes, depreciation and amortization, which is fairly expensive, but Oracle could cut its costs significantly, so the purchase could eventually boost earnings.
Shares of Informatica Corporation increased from roughly $14 in 2006 to over $45 in 2010. In addition Informaticas 12months Total Revenue went from $324.60million in 2006 to $500.69million in 2009. Its Net Income went from $36.21million in 2006 to $64.21million in 2009. For the first three quarters in 2010 Informatica Corp reported a combined 9months Total Revenue of $379.27million with a combined 9months Net Income of $51.69million.

Therefore the investigation by a law firm concerns whether the Informatica Board of Directors will undertake an adequate and fair sales process in the event of a takeover and whether they will breach their fiduciary duties to Informatica Corporation (NASDAQ:INFA) shareholder by agreeing to an offer that undervalues Informatica Corp and by failing to adequately shop the Company before entering into any transaction. A potential class action lawsuit would seek to maximize the amount of money and information INFA shareholders would receive in a buyout, so the law firm.