Faruqi & Faruqi, LLP Announces Filing of a Class Action Lawsuit Against LeapFrog Enterprises, Inc.
Notice is hereby given that Faruqi & Faruqi, LLP has filed a class action lawsuit in the United States District Court for the Northern District of California, case no. 3:16-cv-01161, on behalf of shareholders of LeapFrog Enterprises, Inc. (“LeapFrog” or the “Company”) (NYSE:LF) who hold LeapFrog and have been harmed by LeapFrog’s and its board of directors’ (the “Board”) alleged violations of Sections 14(d)(4), 14(e) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) in connection with the proposed sale of the Company to VTech Holdings Ltd. (“VTech”).
On February 5, 2016, the Company announced it had entered into an Agreement and Plan of Merger (“Merger Agreement”) under which VTech would acquire all of the outstanding shares of LeapFrog through Bonita Merger Sub, LLC, a newly formed subsidiary of the acquirer (the “Proposed Transaction”), in a Tender Offer. The Tender Offer is scheduled to expire at 12:00 midnight Eastern Time on April 1, 2016.
The complaint charges LeapFrog and the Board with violations of Sections 14(d)(4), 14(e) and 20(a)the Exchange Act.
Pursuant to the terms of the Merger Agreement, which was unanimously approved by the Board, LeapFrog shareholders will receive $1.00 in cash per share for each share of LeapFrog they own. The offer is inadequate since, for the first half of 2014, LeapFrog stock traded over $7.00 per share, and for most of the second half of 2014, well over $5.00. Furthermore, for the first half of 2015, the Company’s stock traded well over double the Offer Price.
The complaint alleges that the Schedule 14D-9 Solicitation/Recommendation Statement (“Recommendation Statement”) filed with the Securities and Exchange Commission (“SEC”) on March 3, 2016 provides materially incomplete and misleading information about the Company and the Proposed Transaction, in violation of Sections 14(d)(4), 14(e) and 20(a) of the Exchange Act. The Recommendation Statement fails to provide LeapFrog’s shareholders with material information concerning the financial and procedural fairness of the Proposed Transaction.
Furthermore, according to the complaint, the Merger Agreement includes a non-solicitation provision, a matching rights provisions, and a $2.9 million termination fee which essentially ensure that a superior bidder will not emerge, as any potential suitor will undoubtedly be deterred from expending the time, cost, and effort of making a superior proposal while knowing that VTech can easily foreclose a competing bid.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action, or have any questions concerning this notice or your rights or interests, please contact Juan E. Monteverde, Esq. aby phone at (877) 247-4292 or (212) 983-9330 or by email at firstname.lastname@example.org.
Please tell us about yourself by completing the form below and we will provide you with additional
information at no cost to you on how to join the Class Action.
* The submission of this form does not create an attorney-client relationship.
Faruqi & Faruqi, LLP
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New York, NY 10017
Tel: (212) 983-9330
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