Shortly before the May 2012 announcement of SAP AG’s planned acquisition of Ariba Inc. for $4.3 billion, Goodwin Procter was engaged to counsel Ariba and its board of directors on anticipated litigation related to the proposed deal.
Beginning the day after the deal was announced, six plaintiffs filed class action lawsuits in two jurisdictions (California and Delaware). The plaintiffs alleged that Ariba’s board breached its fiduciary duties to company stockholders by seeking to sell the company through an allegedly unfair process and for an unfair price and on unfair terms, and that Ariba and SAP aided and abetted in those breaches.
In early June, 2012, Delaware plaintiffs filed a motion for preliminary injunction. After negotiations with plaintiffs’ counsel, all plaintiffs agreed to coordinate the litigation in California. Plaintiffs filed an amended, consolidated complaint in California, alleging similar claims and adding a claim for alleged material omissions from the Company’s disclosures. After discussions and negotiations with plaintiffs’ counsel, on July 24, 2012, the California plaintiffs dismissed the consolidated California action, stating that “counsel for Plaintiffs have determined that it would be in the best interest of the class to dismiss this Consolidated Action and permit the Acquisition to be consummated.”
Subsequently, the Delaware plaintiffs dismissed their cases in the Court of Chancery. The transaction closed on October 1, 2012.
“Plaintiffs’ counsel recognized that the Ariba Board ran a sound process, obtained a fair price, and disclosed the information needed by shareholders to approve the deal,” said Deborah Birnbach, a partner in Goodwin’s litigation group.
The transaction obtained shareholder approval and closed successfully on October 1, 2012.