Jasmine Holdco Demands Equal Access to Accurate Shareholder Information for Aladdin Knowledge Systems
2008-09-11 06:32:02 -
- SafeNet Public Relations: Donna St.Germain, +1 443-327-1454 donna.stgermain@safenet-inc.com or Jasmine Holdco Public Relations U.S.: Brunswick Group Erin Becker, +1 415-293-8461 ebecker@brunswickgroup.com or Jasmine Holdco Investor Relations: MacKenzie Partners Amy Bilbija, +1 650-798-5206 abilbija@mackenziepartners.com or Jasmine Holdco Public Relations Israel: Prometheus Creative Solutions Aya Barak-Meiri, + 972-3-5449494 aya@prometheus-cs.com Jasmine Holdco LLC ("Jasmine") announced today that it had submitted a letter to Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN or "the Company") demanding the Company provide equal access to information the Company may have regarding its beneficial shareholders. Jasmine is the largest shareholder of Aladdin and is also an affiliate of SafeNet, Inc. ("SafeNet"), a global leader in information security.
In prior communications, Aladdin declined to provide any meaningful shareholder data, which one can only surmise is an attempt to preclude Jasmine from communicating with other Aladdin shareholders. All that has been provided is a list of registered holders that lacks transparency for over 80% of the shares, and a list of substantial shareholders (greater than 5% ownership stake) where nearly half of this sub-group has publicly disclosed they no longer hold shares in Aladdin.
David Fishman, speaking on behalf of Jasmine said, "The very fact the Company does not have, or refuses to share accurate shareholder lists, strongly suggests either an indifference to maintaining close relationships with their owners or an unwillingness to maintain an even playing field. If the Company does not have updated or more accurate information, such information is easily accessible to them upon their request."
Mr. Fishman continued, "Given the Company's abrupt rejection of our transaction proposals along with its publicly stated confidence in its standalone strategy and plan, we question why Aladdin's Board and management would restrict the flow of information to its owners. We believe our fellow shareholders deserve more than defensive legal maneuvering. Along with equal access to accurate shareholder information, we would hope that the Company would provide shareholders with the strategic plan that supposedly provided the basis for its Board's rejection of our proposals."
The demand comes as follow-up to Jasmine's previous request for the Company to call an Extraordinary General Meeting of Shareholders to replace three of Aladdin's directors with independent board representatives. The mandate of the independent nominees is to maximize shareholder value by selling Aladdin to the highest bidder on the most favorable terms available to shareholders as well as providing better corporate governance and oversight. Israeli law requires Aladdin to call the Extraordinary General Meeting by September 18, 2008, and to hold such a meeting no later than October 23, 2008.
Jasmine previously submitted a proposal to the Company to acquire all of the outstanding ordinary shares of Aladdin by way of a merger transaction for $13.00 per share in cash. The proposal represents a premium of nearly 50% compared to Aladdin's stock price prior to Jasmine making significant public market purchases, and nearly 35% above where the stock price closed after Jasmine's initial Schedule 13D filing on August 7, 2008. They also described an alternative proposal to acquire Aladdin's Digital Rights Management (DRM) business for $125 - $135 million in cash. This amount represents - just for the DRM business - 115% of Aladdin's entire enterprise value prior to the commencement of Jasmine's share purchases.
Below is the full text of the letter that Jasmine sent to Aladdin's Board of Directors on September 9, 2008: -0- September 9, 2008 The Board of Directors c/o Mr. Jacob (Yanki) Margalit Chairman of the Board and Chief Executive Officer Aladdin Knowledge Systems Ltd. 35 Effal Street Kiryat Arye, Petach Tikva 49511 Israel Dear Members of the Board of Directors: We received the letter yesterday from your counsel along with the Register of Substantial Shareholders - nearly three weeks after our original request under the Israeli Companies Law. We would like to highlight a number of issues, which at best are gross inaccuracies, and at worst, intentional misrepresentations of the Company's major shareholders: -- You continue to list FMR, Diker and Galleon as major shareholders (in the substantial shareholder register as well as other public filings and the like). All of these investors have reported no further holdings in their most recent US SEC 13F filings. We do not believe it is appropriate for you to hide behind obviously outdated 13D and 13G filings and provide a substantial shareholder register you likely know to be false. -- Juniper Trading Services is listed as your largest shareholder. Representatives from related entities have told us that they have sold their shares. As your largest shareholder, we believe our fellow owners would be extremely disillusioned to learn that four of your seven disclosed independent substantial holders were no longer major shareholders of the company. We also requested any non-objecting beneficial owners (NOBO) and DTC participant lists that the Company may have obtained so as to ensure that we were provided a level playing field with respect to shareholder information. We were disappointed to learn that you would not provide such lists (which in all likelihood provide further proof of the inaccuracies in the substantial shareholder data you have provided us). Given your publicly stated confidence in your independent standalone plan to deliver greater value to shareholders, we would question why Aladdin's Board and management would restrict the flow of information to its owners. As your largest shareholder, we believe our fellow shareholders deserve more than defensive legal maneuvering. Finally, our counsel has pointed out to your's that Israeli corporate law does not permit corporate resources to be expended to skew the outcome in favor of incumbent directors in a contested election. It appears to us that you are expending significant resources on proxy solicitation firms all of whom are working hard to distort the outcome in just such a fashion. We remain hopeful that Aladdin will clarify the inaccuracies in its shareholder data and we reiterate our request that Aladdin provide us with the additional information that would allow for equal and effective communications with shareholders. We fully expect the company to abide by its obligations under Israeli law and issue the notice of the Extraordinary General Meeting on our before the September 18 deadline. Sincerely, Jasmine Holdco LLC David Fishman Authorized Signatory cc: Clifford M. J. Felig, Dr. Israel (Reli) Leshem, Steve Camahort, Alex Slusky
About SafeNet, Inc.
SafeNet is a global leader in information security. Founded 25 years ago, the company provides complete security utilizing its encryption technologies to protect communications, intellectual property and digital identities, and offers a full spectrum of products including hardware, software, and chips. UBS, Nokia, Fujitsu, Hitachi, Bank of America, Adobe, Cisco, Microsoft, Samsung, Texas Instruments, the U.S. Departments of Defense and Homeland Security, the U.S. Internal Revenue Service and scores of other customers entrust their security needs to SafeNet. In 2007, SafeNet was acquired by Vector Capital, a $2 billion private equity firm specializing in the technology sector. For more information, visit www.safenet-inc.com.
Editor's Note: SafeNet is a registered trademark of SafeNet, Inc. All other trademarks are the property of their respective owners.
Expects Company to Schedule Extraordinary General Meeting as
Required by Law
