SAN DIEGO and LAS VEGAS, July 16, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of SHFL entertainment, Inc. (NASDAQ: SHFL) ("SHFL"), by Bally Technologies, Inc. (NYSE: BYI) ("Bally"). On July 16, 2013, the two companies announced a definitive merger agreement in which Bally will acquire all of the outstanding shares of SHFL at a per share price of $23.25 in cash.
Is the Acquisition Best for SHFL Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at SHFL is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger. The $23.25 merger consideration represents a premium of 24.3% based on SHFL's closing price on July 15, 2013, which is substantially below the average premium of 49.43% for comparable transactions in the past five years.Further, on June 4, 2013, SHFL reported record revenue and net income for the second quarter ended April 30, 2013. Specifically, the company reported total revenue growth to $77.4 million, an increase of 17% from the prior year. SHFL also reported that its net income rose 22% to a record $11.8 million, compared to the same quarter 2012. In addition, the company reported a year-over-year forty basis point increase in gross margin to 65%. In announcing the company's quarterly results, SHFL's Chief Executive Officer Gavin Isaacs stated, "Given the 22% increase in net profit that we announced today, we strongly believe that consistent execution against our strategic initiatives is the right blueprint for building long-term, sustainable value for our shareholders." Given these facts, Robbins Arroyo is examining SHFL's board of directors' decision to be acquired by Bally now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.