Douglas or Anyone:
Two years ago we had the opportunity to calculate the impact of the convertible preferred offering before the bottom fell out of the share price. We did not discuss the subject publicly until 9/3/98.
The S-4 filed 6/2/2000 referenced by you and others contains the following passage:
"The completion of the merger depends on a number of conditions being satisfied, including the following:
- approval of the merger by at least a majority of the votes of QLogic cast on the proposal.
- approval of the merger by the holders of at least a majority of the shares of Ancor common stock outstanding on the record date;
- expiration or termination of the Hart-Scott-Rodino waiting period;
- the absence of any legal restraint blocking the merger;
5
<PAGE> 16
- receipt of a legal opinion to the effect that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code;
- QLogic must be advised in writing by its independent accountants that the merger qualifies as a pooling-of-interests for accounting purposes;
- the amount of dissenting Ancor common stock shall not exceed 5% of the common stock outstanding;
- Ancor's representations and warranties to QLogic, as set forth in the merger agreement, shall be true and correct, except where the failure to be true and correct would not have a material adverse effect on Ancor;
and
- QLogic's and Amino Acquisition Corp.'s representations and warranties to Ancor, as set forth in the merger agreement, shall be true and correct, except where the failure to be true and correct would not have a material adverse effect on QLogic."
[bold emphasis mine]
This is not the first time this point has been raised. I was alerted to this issue by another shareholder at the annual meeting. Subsequently the shareholder told me their broker checked with Ancor management and was told that approval of the merger would only require a simple majority of the shareholders.
My concern: Is this a potential deal breaker? I read the above passage to say a mere 1.5M shares voting against the merger will kill it. If one or more parties thought it would be in their financial interest to keep Qlogic and Ancor from merging, wouldn't it take a commitment of only $45M to buy a sufficient stake to prevent the merger?
Also from the S-4:
"Only shareholders of record of Ancor common stock at the close of business on July 3, 2000 are entitled to notice of, and will be entitled to vote at, the special meeting or any adjournment or postponement."
Am I misreading the filing, am I being paranoid, or both?
Perhaps someone more familiar with mergers can comment on whether 95% approval is common, and if not common, what might explain the reason for the requirement in this merger. Could this filing be amended with a different approval requirement in a subsequent filing?
I'd sure hate to be surprised at the last minute.
Greg |
