An investor in optionsXpress Holdings, Inc. (Public, NASDAQ:OXPS) filed a lawsuit in State Court over alleged breaches of fiduciary duty by certain directors of Options Xpress Holdings breaches of fiduciary duty by certain directors of options Xpress Holdings arising out of their attempt to sell optionsXpress Holdings too cheaply and via an unfair process to the Charles Schwab Corp.
On Monday, March 21, 2011, OptionsXpress Holdings, Inc., (NASDAQ-GS:OXPS) and the Charles Schwab Corporation (NYSE:SCHW) had announced they have signed an agreement under which Schwab will acquire optionsXpress. Under the terms of the proposed agreement, optionsXpress stockholders will receive 1.02 shares of Charles Schwab Corporation (NYSE:SCHW) stock for each share of ptionsXpress Holdings, Inc., (NASDAQ-GS:OXPS) stock. Based on Charles Schwab’s closing stock price as of March 18, 2011, the transaction values each OptionsXpress Holdings, Inc. (NASDAQ:OXPS) share at $17.91, resulting in a total transaction value of approximately $1.0 billion.

Indeed, shares of OptionsXpress Holdings, Inc. (Public, NASDAQ:OXPS) increased in response to the takeover news from $15.16 on Friday to $17.66 on Monday.

The plaintiff alleges that the offer is unfair to OXPS stockholders. In fact, OXPS shares traded as recently as December 2010 as high as $21 per share and in April 2010 as high as $18.07, thus giving some OXPS stockholders with no premium but asking them to hand over their shares at a discount. OXPS shares have traded also during March, August and November 2010 near the offer thus leaving only a meager premium. During 2009 OXPS shares traded also multiple times above the current offer and during 2008 and 2007 OXPS shares traded several times significantly above the offer.

Additionally certain stockholders representing 22.9% of optionsXpress stock have already signed a voting agreement committing to vote these shares in favor of the transaction. In addition optionsXpress Holdings performed consistently over the past years. optionsXpress Holdings’ reported consistent 12months Total Revenue over the past four years ranging from $231.44million to $247.03million. Its Net Income ranged over the past four years from $51.90million to $97.72million.

Furthermore the plaintiff alleges that the defendants made no attempt to auction the company in order to obtain the highest and best price for the shareholders and the company mane no disclosure that it was ‘for sale’. Despite this, so the plaintiff, the optionsXpress Holdings board of directors agreed to provisions in an attempt to lock-up the low acquisition price by as $40million termination fee provision.