Shareholder suits filed against Gateway sale

By on September 13, 2007, 12:04 PM
Acer's proposed acquisition of rival PC maker Gateway is under fire from two investor lawsuits, both alleging that that Gateway directors “breached their fiduciary duties to stockholders” by approving the buyout and that they are selling the company below its worth to Acer.

Gateway was once valued in the billions. The company turned down a bid from Compaq for $7 billion in 1997, although it has lost that kind of market value after the end of the dot-com boom.

The two companies agreed to a deal in August in which Acer would acquire Gateway for $710 million, vaulting the Taiwanese company as the world's third-largest PC vendor. The combined revenue of the two companies is expected to top more than $15 billion, and their combined shipments would top 20 million desktops and laptops annually. However, if Gateway’s biggest shareholders start to take issue with the price of the deal, the acquisition could face a setback.

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