Mandiant shareholder sues to block $5.4b Google deal

Investors given 'materially incomplete and misleading' info, it is claimed

A Mandiant shareholder has launched a legal challenge to block Google's $5.4 billion takeover of the threat intelligence firm.

According to a lawsuit filed in a New York federal district court by shareholder Shiva Stein, Mandiant made "materially incomplete and misleading" statements to investors in financial documents filed with the US Securities and Exchange Commission (SEC) about the planned acquisition

On March 31, the cybersecurity company filed a proxy statement [PDF] with the SEC about the Google deal. Mandiant also distributed financial documents to shareholders and recommended they vote in favor of the transaction, under which Mandiant will become a wholly-owned Google subsidiary.

As per the terms of the deal, each Mandiant stockholder will receive $23 for each share owned. Today, the stock is $22.40 apiece, and was about $19.38 before word of the takeover emerged in early March.

However, Mandiant's financials submitted to the SEC don't disclose the whole picture, the lawsuit alleges.

Specifically, Mandiant's management team along with financial advisors at Goldman Sachs prepared a set of non-public financial forecasts for Mandiant's board of directors about the cybersecurity company's valuation, the lawsuit claimed. These numbers, which investors may well be interested in or need, didn't make it into the public proxy statement, we're told.

"Accordingly, the proxy statement should have, but fails to provide, certain information in the projections that Mandiant management provided to the Board and the financial advisors," according to the lawsuit.

Stein asked the court to force Mandiant to disclose the missing financial information to its shareholders before they vote on the deal, and to prevent Mandiant from moving forward with the planned acquisition until shareholders can review the non-public financials.

Google and Mandiant announced the acquisition on March 8. If finalized, the deal will be one of Google's largest, coming in second to its $12.5 billion purchase of Motorola phone division Mobility in 2011.

The news of the proposed $5.4 billion purchase followed media reports that Microsoft had tried unsuccessfully to buy the threat intel giant. 

Google has been working to unseat Microsoft as the No. 2 cloud provider and trying to use its security tool chest to bring more enterprise customers onto its cloud — and off of Microsoft Azure and Amazon Web Services. 

Successfully closing the Mandiant deal would be a big win for Google in this regard. But it could go off the rail if regulators or the courts intervene.

Google did not immediately respond to The Register's request for comment about the lawsuit. ®

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