Boston, MA 10/22/2013 (wallstreetpr) – One of the high flyers of dot com boom, Tellabs, Inc. (NASDAQ:TLAB) and its management have decided to sell the company to Marlin Equity Partners for $891 Million. But it seems that company’s management has decided to turn a blind eye to the cash which company already holds.
As an independent entity, Tellabs had not been performing well and had recorded 11 consecutive quarters of losses. So in way, it may seem that company is rather being supplied with oxygen when it was deep under the waters of financial trouble. But some people on the street think that it is possible that company’s management did not do a good job of looking for better buyers for the company. As of now, company holds more than $500 million of cash on its books. Hence, it means that company is effectively being sold for just $391 million, which is the difference between price being paid and cash held by the company. And it seems that atleast some legal entities also feel the same. Levi & Korsinsky has decided to do a thorough investigation of company’s Board of Director’s. This investigation would among other things, also try to check whether company’s directors have faithfully conducted their fiduciary duties of finding the apt buyer for company or not. But it seems that company also run into a mountain of bad luck. In mid 2012, company’s then CEO died of cancer. This was followed by co-founder’s announcement of being suffering from similar disease and his intent to step down. Then in May this year, company’s CFO decided to resign quoting personal reasons.
The new buyer would pay $2.45 per share of Tellabs. The stock did react positively to the news and is now quoting at a market capitalization of $876 million, which is pretty close to the price being paid by the buyer.
