Boston, MA 04/11/2014 (wallstreetpr) – Zygo Corporation (NASDAQ:ZIGO) is a $364 million organization which provides precision measurement technology. The company mostly serves the semiconductor equipment market. The company’s products help in enhancing production yield and monitoring of the production processes.
The company recently announced a merger deal with Ametek. According to the agreement, Ametek will acquire the outstanding shares of the company at the value of $19.25 per share of the common stock. However, the tie-up agreement is already generating more heat than light. On that note, a leading shareholder rights firm is investigating Zygo. Tripp Levy stated in a statement that its investigation into the looming tie-up of Zygo and Ametek seeks to unearth potential irregularities in the deal.
The investigations are expected to touch on a wide range of issues. The investigators will be looking into a potential breach of fiduciary duty by the board of directors of Zygo. A case of breach of fiduciary mandate by the board would arise if the board failed to undertake proper auction process to ensure maximum value for the shareholders.
Conflict of interest
The investigations will also look into possible conflict of interest in the looming transaction. The investigators, in a statement to newsrooms, stated that the price of $19.25 per share which was agreed upon as the acquisition cost seems to be unfairly low.
Shares of Zygo Corporation (NASDAQ:ZIGO) are currently trading in the range of $19.20 per. The shares were trading below that mark before the announcement of the acquisition deal. The shares traded in the brackets of $13.12 and $19.27 in the past one-year timeframe.
Unfairly low transaction
According to the investigators, the transaction of the $19.25 per share that is less than two times the book value per share of Zygo Corporation (NASDAQ:ZIGO). That on itself, the investigators said, suggests unfair shareholder value in the looming acquisition. Moreover, Tripp Levy stated in a press release that Zygo has more than $90 million in cash, translating to $4.79 per share. Also, the company has no long-term debt liabilities in its balance sheet. Once again, that suggests possible unfair value in the agreement.
In conclusion
There seems to be many things that Tripp Levy investors seek to unearth. The investors may also look into the decision of the company’s CEO and chairman of the board of directors who control about 25 percent stake in Zygo Corporation (NASDAQ:ZIGO), to vote in favor of the deal.
Nonetheless, it seems investors are making good of the acquisition news and shares are trending high currently.
