Thought some here might be interested.....
Investors sue to block S3's acquisition of Diamond
By Bloomberg News
Special to CNET News.com
August 11, 1999, 2:35 p.m. PT
SAN JOSE, California--Diamond Multimedia, maker of Rio portable Internet music players, was sued by shareholders who claim a
proposed $200.8 million stock acquisition by S3 undervalues their shares.
S3, the No. 2 designer of fast graphics chips for personal computers, has offered to exchange each share of Diamond Multimedia for
0.52 share of S3. Santa Clara, California-based S3 will assume Diamond's outstanding options.
The proposed acquisition, announced June 22, is intended to make S3 a competitor in the Internet appliance and home networking
markets, S3 said in a statement. Shareholders of Diamond Multimedia, though, say the San Jose-based company is being unloaded "at
bargain-basement prices."
"The intrinsic value of the equity of the company is materially greater than the consideration proposed," Diamond Multimedia
shareholders Neal and Brenda Strum said in the suit.
The suit, filed last week in Santa Clara County Superior Court, seeks class-action status and a court order to prohibit S3 from acquiring
Diamond Multimedia. It names Diamond Multimedia, its directors, and S3 as defendants.
S3 spokesman Paul Crossley described the suit as "harassment" and referred all questions about it to Diamond Multimedia. Diamond
Multimedia couldn't be reached for immediate comment.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
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