GTSI goes to court to fight takeover bid
Company claims Eyak violated its operating agreement
- By John Moore
- Sep 24, 2010
GTSI has filed suit in a Delaware court to thwart Eyak Technology’s $67 million takeover bid.
The suit, filed Sept. 14 in the state’s Court of Chancery, hinges on EyakTek’s operating agreement and the three-way ownership of the company. GTSI owns a 37 percent stake in the company, while Eyak Corp.’s slice is 51 percent and Global Technology’s interest is 12 percent. GTSI asserts EyakTek is in breach of the operating agreement. Eyak Corp. is an Alaska Native Corporation.
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Law360, a business law news service, reported that GTSI's suit contends that “certain major decisions require the approval of 65 percent of the company’s members.”
Given that formula, GTSI’s consent would be required to hit the 65 percent threshold.
That consent doesn’t appear to be forthcoming. GTSI has rejected EyakTek’s $7-a-share bid, which it termed “grossly inadequate.” The company also enacted a shareholder rights plan. In a statement, EyakTek, an Alaska Native-owned small business, termed that plan a “poison pill” and a measure “customarily viewed as a management entrenchment device detrimental to the interests of stockholders.”
A GTSI statement said the shareholder rights plan aims to ensure a fair process and is not a move to prevent a sale.
A spokesman for GTSI said the company does not comment on matters before the court. In a statement, EyakTek said it plans to contest GTSI’s position.
“While we will not comment on the specifics of the litigation, we believe that the issues raised are without merit and we intend to vigorously contest them,” the statement notes. “We believe the most important issue is maximizing the value for GTSI’s stockholders, and we are confident that our proposal does that.”
John Moore is a freelance writer based in Syracuse, N.Y.