Eminence Capital has opposed Vista Equity’s acquisition offer for online education company Pluralsight, saying the $20.26 per share price is “artificially low.” As a result, Eminence is seeking records on the company’s sales process under Delaware law.
In a Monday letter, Eminence accused Pluralsight of running a manipulated sales process designed to benefit the company’s management and Vista, that took advantage of a shift in the timing of Pluralsight’s annual user conference that reported weaker than expected growth.
However, Pluralsight said in a statement that the deal “was the result of a thorough review of alternatives conducted by the board of directors and a robust process” overseen by a special board committee. The company also said it spoke to 14 potential buyers and negotiated a reduced liability under its tax receivable agreement.
Pluralsight shares gained 1% as of 1:40 p.m.
Pluralsight was not seeking to go private or in need of a cash injection when Vista said it was interested in acquiring the company, Eminence said. The activist criticized Vista’s offer for its low premium, given how much COVID-19 has pushed learning online and the long-term demand for software skills.
“When reviewing the facts and circumstances surrounding this merger agreement, we can only come to one conclusion: motivations completely at odds with maximizing shareholder value drove a sham process designed to support a pre-determined decision to sell to Vista at an artificially low price in order to benefit management and Vista at the expense of shareholders,” Eminence said in a press release.
Eminence, owner of just under 5% of Pluralsight shares, is joining Akaris Global Partners in opposing the transaction.
Pluralsight is controlled by founder and CEO Aaron Skonnard, who owns about 53.6% of the total voting power.
The deal with Vista already has the support of shareholders controlling a majority of Pluralsight’s stock. However, it also needs to be approved by a majority of holders who are not party to a tax agreement that dates to Pluralsight’s initial public offering in 2018.