Intel has finally got Shiva for the price it wanted to pay, after sustaining a barrage of lawsuits and winning the support of concerned Shiva shareholders.
Under the terms of the merger, completed on Monday, Intel will pay $6 per share in cash for remote access equipment vendor Shiva, the same price it initially offered but which was criticised by shareholders for being too low.
Shiva will now become a wholly owned part of Intel and will be renamed Intel Network Systems. Shiva's share price closed at $5.96 on 26 February.
Customer sales and technical support will be handled through existing contacts. Intel said there are no immediate plans to phase out any Shiva products or to lose any Shiva brand names.
In January, Massachusetts based Shiva agreed to pay out $4.35 million settlement charges to shareholders related to lawsuits filed in 1997. These lawsuits charged Shiva with publishing misleading information about its Q4 1996 financial results. Shiva pointed out that its insurers will foot some of that bill.
Shiva then faced a second round of lawsuits in October last year following the merger announcement. Shareholders alleged that eight Shiva directors had financial interests in the merger, including close personal and business ties to Intel, that prevented them from seeking the best deal for Shiva's shareholders.
Shareholders contested that $6 a share - valuing the company at around $185 million - was not enough for Shiva, a valuable player in the virtual private networking market.
Shiva had added fuel to the fire by restating its financial results to show a better performance after the Intel acquisition offer. Shiva said the changes reflected the one time charge for the acquisition of Isolation Systems. Shareholders however said the changes made the company worth more than Intel was paying.
In February, Shiva said it had agreed in principle to settle this second wave of lawsuits charges, although a financial sum has not yet been agreed. A spokesman for Shiva said details would emerge over the next six months.
"The deal is done. Only time will tell whether or not the claims are pursued," said the spokesman.
Announced in October 1998, the acquisition was originally due to be completed in January.
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