MPS Settles Lawsuits
MPS Settles Lawsuits
MPS Group Inc said Tuesday it agreed to settle two shareholder class-action lawsuits related to its proposed sale to Swiss staffing firm Adecco.
MPS Group denied allegations of impropriety related to the sale and believes that the existing disclosures regarding the proposed merger were appropriate under the law. Nevertheless, MPS Group and the other defendants have agreed to settle the putative class action lawsuits in order to avoid costly litigation and reduce the risk of any delay to the closing of the merger, the company said in a release.
The shareholder lawsuit classes are led by Roland Cherwick and Paul J. Simpson. Both cases were filed within weeks of the s announcement.
As part of the settlement, Jacksonville-based staffing company MPS Group agreed to provide additional information to the two classes of shareholders blindsided by the October announcement and the proposed $1.3 billion cash deal.
Until the boards decision to sell MPS in October 2009, we were not for sale, and although there were several contacts with the Adecco Group, the board did not believe that those contacts were indications of a firm offer from the Adecco Group, and thus the board did not consider there to be a need to contact other potential buyers at that time, MPS disclosed in additional regulatory filings with the U.S. Securities and Exchange Commission.
Zurich-based Adecco's takeover of MPS Group is pending shareholder and regulatory approval, although the European Union gave its OK in mid-December. The deal is expected to close in the first quarter of this year.
Shareholders will vote on the proposed merger at a special meeting Jan. 15.
MPS Group disclosed a chronology of events that revealed the company began considering a possible sale in late July. At a July 28 board meeting, The board concluded that although we were well-positioned as an independent company and were not for sale, it would be appropriate and possibly beneficial to our shareholders to investigate a potential strategic transaction with the Adecco Group in more depth.
MPS Group also went into more detail about how it arrived at the proposed amount of the sale.
In return for the additional disclosures, the plaintiffs in both actions have agreed to the dismissal of their respective lawsuits and to a stay of the proceedings, subject to the execution and approval of a final settlement agreement. In addition, the company has agreed to the payment of the legal fees and expenses of plaintiffs' counsel in an amount to be negotiated by the parties. The payment will not affect the amount of merger consideration to be paid in the merger.
MPS Group Adecco, a Delaware corporation and Jaguar Acquisition Corp., a Florida corporation and subsidiary of Adecco, were named as defendants in the lawsuits.
The settlements are subject to court approval. If the court approves the settlement, the lawsuits will be dismissed with prejudice.