MELBOURNE, Fla.--(BUSINESS WIRE)--The Board of Directors of AuthenTec (NASDAQ: AUTH), the world’s leading provider of smart sensors and solutions, today issued the following statement in response to the proposal by UPEK to combine the businesses of AuthenTec and UPEK and the nomination by UPEK of a slate of individuals for election to replace the AuthenTec Board of Directors:
After careful consideration of the UPEK proposal with our financial and legal advisors, the Board of Directors determined that this highly dilutive and speculative transaction is not in the best interests of AuthenTec’s stockholders.
As active participants in the same industry, AuthenTec and its Board are very familiar with UPEK. The Board rejects the proposal on the basis of its inadequate financial terms and a lack of confidence in UPEK’s financial position. Furthermore, the failure of UPEK to provide any information to AuthenTec’s stockholders on its financial performance, prospects or value makes it impossible for our stockholders to evaluate UPEK’s proposal.
The Board believes that the special dividend payment contemplated in UPEK’s proposal would leave the combined company without the financial resources necessary to execute on its strategic objectives and without the capacity to extract potential synergies. AuthenTec’s balance sheet and cash position represent important competitive advantages in the current economic environment. If effected, this special dividend would come solely from AuthenTec’s cash, with no financing or cash provided by UPEK. Moreover, the Board believes that the 50/50 equity split proposed by UPEK significantly overstates the value that UPEK would bring to the combined company and that the proposal relating to contingent value rights is highly speculative and potentially of little value to AuthenTec stockholders.
The Board also notes that UPEK’s unsolicited proposal followed within days of a January 23rd letter from AuthenTec to UPEK informing UPEK of AuthenTec’s claim that UPEK products infringe five (5) AuthenTec patents. We had hoped to discuss this in a professional manner as we had provided UPEK thirty (30) days to respond to our letter.
The Board and management are committed to continuing to act in the best interests of AuthenTec’s stockholders.
America’s Growth Capital is AuthenTec’s financial advisor, and Alston & Bird LLP and Morris, Nichols, Arsht & Tunnell LLP are the outside legal counsel to AuthenTec.
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