Salesforce’s $15.7 billion acquisition of Tableau Software is facing legal challenges.
A pair of new shareholder lawsuits filed this week allege that merger documents omitted key information, and assert that the deal undervalues Tableau’s growth potential. The Tableau stock owners allege that the companies filed a “materially incomplete and misleading” document with the U.S. Securities and Exchange Commission a few weeks after the deal was announced.
UPDATE: A third lawsuit against Tableau was filed Wednesday morning, a day after the first two. It contains many of the same allegations, but the plaintiff is represented by a different firm.
The document in question is called a “solicitation statement,” which is a response to an offer to buy stock, in this case Salesforce’s plan to acquire Tableau in an all-stock transaction. The shareholders allege that the document didn’t disclose enough information about Tableau’s financials, the underlying data behind how the two sides got to a valuation for Tableau and background about the sale process.
The suits allege that the statement doesn’t give enough information about the future employment of Tableau executives once the proposed acquisition goes through.
The lawsuits, filed in federal court in Delaware this week, accuse Tableau and executives including CEO Adam Selipsky and co-founder Christian Chabot of violating the Securities Exchange Act of 1934. One of the suits also names Salesforce as a defendant and seeks class action status.
Salesforce and Tableau declined to comment on the two lawsuits.
The plaintiffs, who are both being represented by the same firm, are asking the courts to block the deal. If the acquisition is approved, they want compensation for the companies’ alleged violations of the Securities Exchange Act.
The deal, announced just over a month ago, is the largest acquisition yet for Salesforce. It makes the company a major player in the Seattle tech scene. Salesforce Co-CEO Marc Benioff said the company plans to treat Seattle as Salesforce’s HQ2, and the deal makes the combined company a major player in the region’s tech scene.
Recent filings with the SEC pulled back the curtain on the challenging negotiations over more than six months that brought the deal together. The document also reveals that Tableau would be on the hook for a $552 million “break-up fee” should the deal not go through.
Here are the full lawsuits filed earlier this week:
Shiva vs. Tableau by Nat Levy on Scribd