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Solution 6 expected lawsuit all along

Solution 6 expected lawsuit all along

Despite a US Federal Trade Commission investigation and a class action lawsuit from Elite shareholders, Solution 6 remains confident the $150.5 million acquisition will go ahead.

According to Solution 6, the lawsuit did not stage an attack on the merger itself, but on the agreed price of the acquisition.

"They're talking about violation of fiduciary duties of the Elite board directors, but that really refers to the shareholders wanting a higher price," said Rushenka Perera, Solution 6's communications manager.

Perera said both companies did not expect to alter the original purchase price of $150.5 million.

The takeover was announced last month, just one week after Solution 6's announcement that it would acquire legal information provider Lawpoint from Telstra for $40 million.

"We think we paid a very good price, and, with the support that we have of the Elite directors, they seem to think we did too," she said.

Neither company expected the lawsuit would seriously affect the acquisition, she said.

"These kinds of class action are quite routine in the US, in regards to these acquisitions. We were expecting something of this nature. All it (lawsuit) will do will be put a delay on the completion of the transaction," she said.

The Elite acquisition was to be partially funded by Telstra's $50.5 million boost into Solution 6, announced at the same time as the Solution 6-Elite merger, which saw Telstra increase its shareholding in Solution 6 to 24 per cent.

Telstra declined to comment on the lawsuit but said it did not plan to alter its current shareholding.


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