Why Former SEC Attorney Willie Briscoe And The Other Law Firms Shouldn’t Challenge the SciQuest Deal

Posted on June 22, 2016

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“Former United States Securities and Exchange Commission attorney Willie Briscoe and the securities litigation firm of Powers Taylor LLP are investigating potential claims against the Board of Directors of SciQuest, Inc. (“SciQuest”) (NASDAQ: SQI) concerning the sale to Accel-KKR. Under the terms of the agreement, SciQuest shareholders will only receive $17.75 in cash for each share owned, which is virtually no premium over the 52-week high and lower than at least one analyst’s estimated value of $19.50 per share.” – June 1st, 2016 BusinessWire

I was recently asked about my take on the SciQuest sale in relation to the growing list of law firms who are now investigating the deal in terms of whether or not the company’s Board of Director’s potentially breached their fiduciary duty.

“Our investigation so far has revealed that the consideration SciQuest shareholders are expected to receive is significantly inadequate. Tellingly, the consideration is well-below the $21.00 per share target price set by JMP Securities. Also, while the Company claims that shareholders will receive a “premium” for their shares, in reality this premium is below the average 51% premium in comparable mergers in the past three (3) years.” – June 15th, 2016 Nasdaq GlobeNewswire

I think that Wiehe and company had to sell – probably much sooner than they had wanted, because the company’s foray into the corporate market isn’t necessarily going as planned. They have to sell now, and then don’t be surprised if the company is flipped and sold to an SAP or an Oracle-type company in the near future.

If I were the shareholders, I would grab the $17.75 per share deal, because the longer things go without the company being sold, the greater the erosion of value. At best, the above action by all of these law firms may be able to squeak out another dollar or so . . . the question is how far is Accel-KKR willing to go and how quickly would they be able to flip the company to make their money.

This is all about money. I think that management simply wants out because it can’t take the company any further because the market has changed too much, and SciQuest is too far behind to go it alone.

What About The Lawsuit Against Me Personally?

I have received many calls and e-mails asking if the lawsuit filed against me by SciQuest for libel has now been dropped. The basis for these queries, is that the news over the past couple of months as shown that my coverage was both fair and accurate.

The short answer is No!

My gut tells me that the lawsuit has nothing to do with any real belief on their part that there has been any slander – they haven’t even challenged the last 5 or 6 posts.  How could they, as the evidence in support of my coverage is irrefutable. This includes an audio of both the company’s CEO and CFO basically confirming what I had been saying all along in terms of issues with SciQuest’s technology and client dissatisfaction. Feel free to check out both my April 26th, 2016 post Ohio Drops SciQuest And The Power Of Truth, and my June 8th, 2016 post Wall Street Journal: SciQuest Agrees to Be Taken Private by Accel-KKR.

The suit I believe had two purposes. 1) to shut me up because I was getting too close to all of the facts including the inside  manoeuvres  regarding the company’s real position and, 2) because my coverage exposed the truth, and therefore forced their hand and time schedule. I guess what I am saying is that their motives are based on vengeance for my exposing the truth.

Of course in the end, and as highlighted in my May 31st, 2016 post Why is SciQuest afraid to go to court?, I may not have the opportunity to even respond to their lawsuit as a result of not having the necessary funds for my defence to be heard. Let’s face it, I am up against a company with considerable financial might.

I have until July 12th, 2016 to come up with $22,000. If I don’t, my defence and the facts that have now and continue to come to light, might never be heard in a court of law.

If that happens, the comfort I have is that I told the truth, and that I have stood by that truth, despite facing a bully who is bigger and has more resources than I. In the end, and if given the choice to have remained silent and not cover this story, or lose it all by seeking the truth, I would rather the legacy that I leave for my children is one based on truth and fighting for what you believe in. This I believe is a far greater legacy than any trust fund or country club membership.

By the way, and if you are so moved, you can contribute (anonymously if you so desire), to my defence fund, through the following link: https://www.gofundme.com/bloggerfund

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Posted in: Commentary