Cogent defends 3M sale, says NEC offer too low
Cogent Inc., the fingerprint-identification systems maker, defended its decision to sell out to 3M Co. and asked a judge to reject calls from Cogent shareholders to put the deal on hold in favor of a higher bid from NEC Corp.
The bid from NEC, Japan's largest maker of personal computers, was too late, was not firm enough and would pose antitrust risks, Cogent's attorney Donald J. Wolfe said Oct. 1 in a Chancery Court hearing in Wilmington, Delaware.
The investors asked Chancery Court Judge Donald F. Parsons to halt the 3M sale and require Cogent to eliminate the deal protections they say are precluding a firm offer from NEC. Parsons said he will rule before 3M's offer expires at midnight, Oct. 7.
Cogent's board rejected NEC's offer of more than $1 billion because it was not a binding bid, Wolfe said. Cogent told NEC that "it was now or never" because 3M's offer was definitive and had a deadline.
An investor attorney, Michael Hanrahan, accused Cogent's founder and chief executive officer, Ming Hsieh, of pushing the board to accept 3M's lower offer of $10.50 a share, or $943 million, partly because he wanted to collect a $153,000 retention bonus.
That argument makes no sense because under an NEC sale, Hsieh would collect $18 million more for the shares he owns, Wolfe said in court.
The case is In Re Cogent Inc. Shareholders Litigation, Consolidated CA 5780-VCP, Delaware Chancery Court (Wilmington).
Locally, 3M has operations in DeKalb.