An investigation on behalf of investors in Sonic Solutions (NASDAQ:SNIC) questioning whether the offer to take over Sonic Solutions at a stock value of $14.17 per SNIC share and the sale process are unfair to Sonic Solutions investors was announced.

The investigation by a law firm concerns whether certain officers and directors at Sonic Solutions breached their fiduciary duty owed to the shareholders of Sonic Solutions (NASDAQ:SNIC) arising out of their attempt to sell Sonic Solutions to Rovi Corporation.

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. 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 investigation concerns whether Sonic Solutions and certain of its officers and directors breached their fiduciary duties owed to Sonic Solutions (NASDAQ:SNIC) investors by failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Sonic Solutions (NASDAQ:SNIC) and by agreeing to an offer that undervalues Sonic Solutions. A potential class action lawsuit would seek to maximize the amount of money and information SNIC shareholders would receive in a buyout, so the law firm.
Further the investigation focuses on whether the Sonic Solutions and its board of directors breached their fiduciary duties to Sonic Solutions (NASDAQ:SNIC) shareholder by failing to adequately shop the Company before entering into any transaction.