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News

10 May 2007

 

Oplink files suit to challenge OCP’s ‘poison pill’

Component maker Optical Communication Products Inc (OCP) of Woodland Hills, CA, USA says that the special committee of its board of directors has adopted a 30-day shareholder rights plan as a precautionary measure to protect the interests of OCP’s minority shareholders while it evaluates the unsolicited offer from photonic component, module and subsystem maker Oplink Communications Inc of Fremont, CA, USA to acquire OCP’s minority shares.

The Furukawa Electric Co Ltd recently agreed to sell its 58.2% majority ownership interest in OCP (at about $1.50 per share) to Oplink, which proposed to also purchase OCP's remaining outstanding common stock not owned by Furukawa (also at about $1.50 per share, a 9% premium to OCP’s 30-day average closing price prior to the announcement of the agreement with Furukawa) .

“The special committee has not reached any conclusions, but we will continue to work diligently and announce the results of our evaluation in due course,” says special committee chairman Hobart Birmingham.

Under the plan, the special committee has declared a dividend distribution of one right for each outstanding share of OCP common stock to shareholders of record as of 14 May. These rights, which will expire on 2 June, will become exercisable only under three specific conditions: the closing of Oplink’s purchase of Furukawa’s 58.2% ownership interest in OCP, the acquisition of more than 15% of OCP’s outstanding common stock by a third party, or the acquisition of any additional shares by Furukawa or Oplink.

Oplink has since filed an action in the Delaware Court of Chancery seeking: a declaration that the ‘poison pill’ shareholder rights plan is invalid insofar as it attempts to prevent the sale of Furukawa’s OCP shares to Oplink; an injunction preventing OCP or the special committee from taking further actions to implement the poison pill (including the distribution of rights to OCP shareholders); and a declaration affirming the right of Oplink and Furukawa to proceed with their transaction, and other relief, including money damages.

“We remain interested in discussing our proposal to purchase all remaining shares of OCP with the special committee,” says Oplink’s president and CEO Joe Liu. “However, we believe that the actions taken by the special committee in adopting the poison pill are inappropriate. While the special committee’s stated reason for its actions is to protect the interests of OCP’s minority shareholders, the interests of the minority shareholders are not threatened by the transfer of Furukawa’s OCP stake to Oplink,” he adds.

See related item:

Oplink grows revenues 20%; agrees to acquire majority stake in OCP

Visit OCP: http://www.ocp-inc.com

Visit Oplink: http://www.oplink.com