Save the date: Cloudera, Hortonworks set merger vote for 28 December
'Twas 3 nights after Xmas and all through the house, shareholders mulled sending the deal south
Cloudera and Hortonworks shareholders will be asked to sign off on the companies' uneven merger on 28 December.
Under the proposed transaction, revealed in October, Cloudera will keep its name and Hortonworks will survive only as a wholly owned subsidiary of the other firm.
Cloudera stockholders will own 60 per cent of the fully diluted shares of the final company and Hortonworks shareholders the remaining 40 per cent.
The proposals were fast-tracked by the Federal Trade Commission last month so the only remaining barrier is stockholders' approval.
The companies have confirmed they plan to seek this approval on 28 December.
The pair will hold two separate stakeholder meetings, and they require a majority at each meeting to vote in favour of the proposals for the merger to go ahead.
However, Hortonworks and its execs face lawsuits over the plans, which broadly allege the vendors misrepresented and omitted information from documents that called on investors to approve the deal.
The first complaint was filed by Alex Victor in the Northern District of California.
The lawsuit claimed Hortonworks' shareholders – who will receive 1.305 common shares of Cloudera for each share of Hortonworks stock owned – were being sold short as the terms are about 16 per cent less than Hortonworks' 52-week high of $26.22.
The suit also alleged that an S-4 filing made with the Securities and Exchange Commission, which called on shareholders to vote for the proposal, "contains materially incomplete and misleading information" on the financial projections for Hortonworks and the sale process leading up to the proposed transaction.
Two separate cases, brought by Barbara Sherry in the Southern District of New York and Patrick Plumley in Delaware, make similar claims.
"Defendants... have failed to disclose material information that is necessary for stockholders to properly assess the fairness of the Proposed Transaction, thereby rendering certain statements in the Proxy incomplete and misleading," said the Sherry lawsuit (PDF).
"The Registration Statement omits material information with respect to the Proposed Transaction, which renders the Registration Statement false and misleading," claimed the Plumley action (PDF).
All three cases were lodged as potential class actions; Victor's lawyers have informed the court of the other two cases but have taken no position on whether they should be coordinated.
An initial case management conference has been set for 14 February in the action brought by Victor. ®