3M Co. Tuesday cleared a hurdle in its effort to buy Cogent Inc., a Pasadena, Calif.-based maker of fingerprint-identification systems, after a judge in Delaware rejected shareholders' challenge to the $943 million deal.
Three Cogent shareholders were seeking to stop the sale to Maplewood-based 3M in favor of another non-binding offer from NEC Corp. that was valued at more than $1 billion.
3M spokeswoman Jackie Berry said she was unable to reach executives for comment.
The ruling in Delaware Chancery Court doesn't guarantee 3M will be able to complete the deal, one of the largest in the company's history. Several large shareholders have said they won't tender their shares because they believe 3M's $10.50-a-share price is too low. 3M's net price actually works out to $430 million, because it would acquire about $513 million in cash on Cogent's books.
From the start, Wall Street appeared to agree another, higher offer could emerge and bid up Cogent's stock to around $11 a share.
But the market appeared to take a different view Tuesday, driving down the price of Cogent shares in after-hours trading to $10.54, the lowest they have been since 3M announced the acquisition Aug. 30.
In his ruling, the Delaware Chancery Court judge called investors' claims that Cogent CEO Ming Hsieh favored 3M's offer because he wanted to collect a $153,000 retention bonus "spurious." Cogent's attorneys had argued in court that Hsieh, who holds almost 40 percent of the California company's stock, would have received about $379 million in a sale to NEC, more than the $361 million he is due to get in the 3M transaction.
The ruling also said Cogent's board had good reason to believe the sale to NEC wasn't firm enough and posed risks because of doubts it could get approved by regulatory authorities.
