HPE’s proposed acquisition of Juniper Networks is facing a new challenge. A shareholder is accusing Juniper of violating securities laws, alleging the networking vendor failed to disclose information to investors.
According to plaintiff John Zaita, disclosures to shareholders about financial arrangements between HPE and Juniper executives allegedly misrepresented the facts. Zaita is now also filing a complaint in court in the U.S. state of California about Juniper’s financial projections. He claims the acquisition by HPE was designed to enrich several HPE executives at the expense of shareholders.
“The breakdown of the benefits of the deal indicates that Juniper insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders such as Plaintiff,” the suit states. According to Zaita, the executives “secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff as a public stockholder of Juniper.”
Role of board members
The indictment targets ten Juniper board members, including CEO Rami Rahim. According to Zaita, they collectively own a large amount of shares in Juniper, which will eventually be converted into merger consideration if the HPE deal goes through. According to the complaint, other shareholders would not benefit in the same way.
Finally, Zaita alleges that after the announcement of the proposed acquisition, Juniper failed to communicate adequately. He believes that Juniper appears unable to provide the necessary data for financial projections, which is essential for a thorough assessment of the deal.
Juniper has not yet responded to The Register, who wrote about the case.