An investor in Sonic Solutions (NASDAQ:SNI) shares filed a lawsuit in State Court against members of the Sonic Solutions board for allegedly breaching their fiduciary duties arising out of their attempt to sell Sonic Solutions too cheaply via an unfair process to Rovi Corp. at a stock value of $14.17 per SNIC share.
According to the complaint the plaintiff alleges on behalf of all shareholders of Sonic Solutions (NASDAQ: SNIC). That the defendants breached their fiduciary duty owed to the shareholders of Sonic Solutions (NASDAQ:SNIC) and seeks to enjoin the acquisition of Sonic by Rovi, rescission of the transaction in the event it is consummated, imposition of a constructive trust, and monetary damages, fees, and costs.
On Thursday, Dec. 23, 2010, Novato, California based Sonic Solutions (NASDAQ: SNIC) and Rovi Corporation (NASDAQ: ROVI) announced that the two companies have signed an agreement for Rovi Corp. and Sparta Acquisition Sub, Inc., a wholly-owned subsidiary of Rovi. to acquire Sonic Solutions in a stock and cash transaction at an enterprise value of the transaction is approximately $720 million. Under the terms of the agreement Sonic Solutions shareholders may elect to receive either $14.00 or 0.2489 shares of Rovi common stock for each share tendered and accepted in the exchange offer, subject to proration and adjustment pursuant to the definitive agreement. Sonic Solutions said the offer represents a 38.2 percent premium to Sonic Solutions’ 30 day average per share closing price as of December 21, 2010.

But shares of Sonic Solutions (SNIC), which traded at $11.37 per share before the takeover proposal, jumped to $14.42 thus above the cash offer option. In addition SNIC traded as recently as April at $13.96 per share and analysts have set a price target as high as $17.00 per share for Sonic Solutions stock and the median price target set by six analysts is $15.00 per share., leaving SNIC investors with little to no premium and granting Rovi Corporation a discount over the SNIC stock price in the open market. Further Sonic Solutions directors and senior management, who own approximately 11.2% of Sonic Solutions´ total equity, have agreed with Rovi to tender their shares and to vote any remaining shares that they own for the merger.

Therefore the plaintiff alleges that the members of Sonic's board of directors breached their fiduciary duties of care and loyalty by, among other things, failing to maximize shareholder value and by approving the merger transaction via an unfair process and that Rovi Corp. aided and abetted the breach of fiduciary duties.