BOSTON, Nov. 6, 2012 /PRNewswire/ -- Block & Leviton LLP ( www.blockesq.com), a Boston-based law firm representing investors nationwide, has commenced an investigation into possible breaches of fiduciary duties by the Board of Directors of MIPS Technologies, Inc. ("MIPS" or the "Company") (NASDAQ: MIPS) with regards to the proposed acquisition of the Company by Imagination Technologies Group plc ("Imagination") and the proposed acquisition of 498 of the Company's 580 patents by Bridge Crossing LLC, an acquisition vehicle of Allied Security Trust ("AST") in a two-part cash transaction.
Under the terms of the agreements, AST will acquire 498 of MIPS' total 580 patent assets for gross proceeds of $350 million. MIPS will retain 82 patents, and will be granted a royalty-free, perpetual license to the patents sold to AST. MIPS will also provide a restricted license to AST for the 82 retained patents. Subject to consummation of the AST transaction, Imagination will acquire the operating business of MIPS, the remaining 82 patents, and license rights to the remaining patent properties of MIPS for $60 million. The net proceeds of the two sales represent a price of approximately $7.31 per share.
This represents a paltry premium of less than 4% to the previous day's closing price of $7.02. MIPS stock traded above the offer price less than one week ago, reaching $7.32 as recently as November 1. Indeed, the average analyst's target price for MIPS is $8.75 per share, nearly 20% more than the combined offers.
Block & Leviton's investigation seeks to determine, among other things, whether MIPS' Directors breached their fiduciary duties by failing to maximize shareholder value in the proposed acquisitions, and the fairness of the process by which the MIPS Directors considered and approved the transaction.