Intermagnetics General Corporation (NDAQ:IMGC) announced yesterday in a 14A filing with the SEC that they plan on moving forward with their merger plans with Royal Philips through their subsidiary Philips Holding (NYSE:PHG). This merger, which was originally announced on June 15th, had been the subject of two outstanding shareholder lawsuits that sought to prevent the merger. The lawsuits alleged that the company had "breached their fiduciary duties by failing to publicly announce an open bidding process or otherwise seek additional officers to acquire Intermagnetics, and by failing to provide full disclosure to certain material financial information." In their filing, the company noted that these lawsuits had been resolved, but gave no details. Shareholders who are on record as of August 16th will be able to vote on the proposed merger on September 26th.

Their proxy statement outlined the details of the transaction:

"If our stockholders adopt the merger agreement and the merger is subsequently completed, you will be entitled to receive $27.50 in cash, without interest, for each share of Intermagnetics common stock you own, unless you have properly exercised your appraisal rights. On June 14, 2006, the last full trading day prior to the public announcement of the merger agreement, the closing price of our common stock was $21.38 per share."

The lawsuits may have had some merit. The buyout premium in this case is only 28% - at a price less than a recent 52 week high made by the company. Why wasn't a bidding process announced so other suitors could potentially offer a greater amount to current shareholders? The board of directors, who approved this plan, are supposed to always act in the best interest of shareholders...

With these lawsuits settled, the company only needs a proxy vote and approval from the EU before moving forward. With a 70% institutional ownership stake, it is likely that the merger will move ahead as planned.

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