Free Newsletter
Register for our Free Newsletters
Access Control
Deutsche Zone (German Zone)
Education, Training and Professional Services
Government Programmes
Guarding, Equipment and Enforcement
Industrial Computing Security
IT Security
Physical Security
View All
Other Carouselweb publications
Carousel Web
Defense File
New Materials
Pro Health Zone
Pro Manufacturing Zone
Pro Security Zone
Web Lec
ProSecurityZone Sponsor
ProSecurityZone Sponsor
ProSecurityZone Sponsor
ProSecurityZone Sponsor
ProSecurityZone Sponsor
ProSecurityZone Sponsor

UPEK Pulls Out Of Merger Proposal With AuthenTec

UPEK : 05 July, 2010  (Company News)
Biometric technology supplier criticises AuthenTec Management over handling of recent merger proposal which resulted in protest resignation of board Chairman
UPEK is terminating its proxy solicitation and merger proposal for AuthenTec which was originally announced on January 29, 2010. While UPEK believes that this proposal would have substantially improved AuthenTec stockholders' value by providing a significant dividend, as well as significant ownership in a much stronger, substantially higher revenue, more profitable, and more global company, the proposal was summarily rejected by AuthenTec's board in the course of a single weekend and never taken to the AuthenTec stockholders at large for proper consideration.

UPEK notes that AuthenTec announced on June 28, 2010 that Robert Grady notified AuthenTec of his decision to resign from his position as Chairman of AuthenTec's Board of Directors. In the resignation letter Mr Grady cites differences of opinion "over the strategic direction of the Company and over the urgency of the need to take action to enhance shareholder value." In his letter Grady explicitly says: "My decision results from my increasing discomfort with the Company's de facto embrace of the status quo, and tolerance of management leadership's actions to resist value-creating transactions. I believe that the Board and management of AuthenTec should take decisive action to enhance shareholder value, but that view, supported in concept, is not reflected in actions. Enhancing shareholder value needs to be more than a talking point." Needless to say, UPEK, as a stockholder of AuthenTec, wholeheartedly agrees with Mr Grady's opinions and applauds his action to resign in protest on behalf of all AuthenTec stockholders.

Among the reasons for terminating its merger proposal and proxy contest, UPEK observes the following issues with AuthenTec:

* It appears that AuthenTec's stock price has not benefited from the announcement of the acquisition of SafeNet, and indeed this acquisition appears simply to have been an action taken by AuthenTec to reduce their available cash and effectively counter the proposal that UPEK made to provide AuthenTec's stockholders with a substantial dividend.

* AuthenTec's stock price is down roughly 85% from the peak post IPO, and has not improved during the recent recovery.

* AuthenTec's board has, as noted in AuthenTec's recent Form 8-K filing, declined at least one other potentially value enhancing transaction besides the UPEK proposal.

* AuthenTec has not, based on our belief and our understanding of the industry, succeeded in winning any substantial new business, and continues to lose money and drain cash.

* Mr Grady, a long-term and highly respected person in the high-tech industry, has resigned in protest as Chairman of AuthenTec after only six months in the position.

In addition, UPEK's business has strengthened over the last year, with quarter on quarter and year on year revenue growth, in part through new business at major customers where AuthenTec was previously the primary supplier. Furthermore, UPEK's unique, patented architecture has allowed the company to become the only producer of capacitive silicon sensors with FBI-grade security certification (FIPS-201). These unique "touch sensor" products have shown growth year over year for the last several years, including during the recession, and have become an increasingly core element of UPEK's strategy. Given UPEK's improving business, AuthenTec senior management's lack of focus on stockholder value creation, and the other AuthenTec issues noted above, UPEK prefers to remain a stand-alone company instead of combining with AuthenTec, and will no longer consider any merger proposal with AuthenTec while AuthenTec is under the existing senior management.
Bookmark and Share
Home I Editor's Blog I News by Zone I News by Date I News by Category I Special Reports I Directory I Events I Advertise I Submit Your News I About Us I Guides
   © 2012
Netgains Logo