Shareholders of US auto parts maker Harman have filed a class action suit against the firm's CEO and board, opposing its $8 billion merger with Samsung Electronics, South Korean media reports.
According to Yonhap on Friday, shareholders filed the lawsuit against Harman CEO Dinesh Paliwal and the board in a court in Delaware, alleging that they did not act in good faith processing the deal with the Korean tech giant.
The shareholders, headed by Robert Pine, said the Harman board put the value of the company too low and agreed to the unfavorable, thereby causing shareholder damages, reports Yonhap. There was a fundamental flaw in the deal, and they also opposed Harman's agreement to not look for competing bidders, it added.
Earlier in December, US hedge fund Atlantic Investment Management, which owns a 2.3 percent stake in Harman, said it would vote against the deal as the buying price was too low.
Samsung announced the acquisition of the company for $8 billion, the biggest in its history, back in November.
The deal will allow the South Korean tech giant to become a tier-1 component supplier in the automobile market. It can also supply its displays and semiconductors together, for the so-called connected cars.
Samsung agreed on $112 per share, 28 percent higher than the price on November 13, and 37 percent higher than the average the month before.
The deal will go through if over 50 percent of Harman's shareholders agree in the shareholders meeting, expected in the first quarter this year.