Google is in the process of trying to acquire cyber threat intelligence firm Mandiant, but a Mandiant shareholder has filed a lawsuit in a New York federal district court to block the $5.4 billion acquisition. The shareholder, Shiva Stein, claims that Mandiant provided “materially incomplete and misleading” information to its investors in financial documents filed with the U.S. Securities and Exchange Commission (SEC) about the proposed acquisition, according to The Register.
On March 31, Mandiant submitted a proxy statement on the deal to the SEC. Mandiant then shared financial statements with its shareholders and suggested that they vote in favor of the deal, which would make Mandiant a subsidiary of Google. In voting in favor of the deal, each shareholder would be agreeing to receive $23 per share for a stock that is current trading at $22.
The issue, though, according to Stein’s lawsuit documents, is that the financial statements that Mandiant distributed to its shareholders were incomplete. Goldman Sachs had recently prepared financial forecasts regarding the company’s valuation for Mandiant’s Board of Directors, and this information was not featured in the financial statements provided to shareholders. Stein requested that the court require Mandiant to disclose these forecasts before the vote on the deal and to prevent Mandiant from moving forward with the deal before doing so.
If the deal is finalized, it will be Google’s second largest acquisition ever. Google is hungry to acquire Mandiant, as it is trying hard to increase the security of its cloud services. Google is currently the number two cloud provider, behind Microsoft, who unsuccessfully tried to purchase Mandiant earlier this year, according to Bloomberg.
Acquiring Mandiant would be a significant boon for Google. However, both Stein’s lawsuit and the powers that be at the SEC may pose significant roadblocks in Google’s efforts to do so.