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Harman International Shareholders To Vote On Samsung Merger Deal This Week

By February 13, 2017 at 7:03 am
Samsung is looking to tap into Harman International's automotive technology business and high-end audio solutions. (Photo : Getty Images)

The deal for Samsung Electronics Co. to acquire Harman International Industries Inc. hangs in the balance this weeks as shareholders of the American company will vote on the transaction during a meeting later this week, industry observers said Monday.

The vote comes after some Harman shareholders filed a class-action suit against the US automotive and audio system maker's chief executive and the board, saying Samsung's offer fell short of the company's corporate value.

Samsung announced last November that it would acquire Harman International for US$8 billion. Samsung's initial plans focused on tapping into the technology firm's car business and develop future products using its high-end audio solutions.

The shareholder meeting is scheduled on Friday (local time) and the agenda is about the Samsung offer.
Under the deal, Harman stockholders will receive $112 per share, which represents a premium of 37 percent to Harman's 30-day average closing share price.

Some shareholders believe that the merger is flawed and inadequate because Harman International's value has been significantly depreciated.

New York-based equity investment firm Atlantic Investment Management, which holds a 2.3 percent stake at Harman, are among the shareholders who said the offer is too low and vowed to vote against the deal.

In the lawsuit against Harman CEO Dinesh Paliwal and the board filed with the Delaware Chancery Court, shareholders accused management of not acting in good faith when they entered the deal with Samsung.

Samsung said the lawsuit will have to be dealt with by Harman. Meanwhile, some analysts think efforts to block the merger by some Harman shareholders will not disrupt the deal.

Shareholders have until the end of November this year to try to exercise their right to vote against the transaction.  

Harman brands include JBL, JBL Professional, Crown Audio, Mark Levinson, Soundcraft, KG Acoustics, Revel, Studer, Harman/Kardon, Martin, AMX, Martin and Infinity.

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