Pluralsight Investor Opposes $3.5 Billion Takeover Bid by Vista

(Bloomberg) -- Another sizable investor in Pluralsight Inc. has come out against its takeover by Vista Equity Partners, arguing the proposed $3.5 billion deal was the product of a rushed process designed to serve one purpose: sell the company.

Eminence Capital, which owns nearly 5% of the software company, said it was outraged by the disclosures around the deal and planned to vote against the transaction unless the price was “materially” improved.

“Vista’s offer does not come close to compensating Pluralsight’s shareholders for the health of its current financial performance nor its long-term value, especially given how well-positioned the company is for future growth,” Eminence Chief Executive Officer Ricky Sandler said in a letter to Pluralsight’s board that was obtained by Bloomberg.

Vista agreed in December to acquire Pluralsight for $20.26 a share in cash, a 6.7% premium to the previous trading day’s close. Pluralsight shares have not closed below the offer price since Dec. 14.

Representatives for Pluralsight and Vista weren’t immediately available for comment.

The deal already has the support of shareholders that own the majority of the voting rights in Pluralsight, the company said at the time. The transaction, however, also requires the support of most of the other investors who aren’t party to a tax agreement that dates back to Pluralsight’s initial public offering in 2018.

Pluralsight said in December that the Vista buyout would deliver immediate cash value for shareholders. Being a private company would also allow it to move faster and be more agile to deliver on its strategic vision. Pluralsight said in regulatory filings that nine other potential suitors had signed confidentiality agreements, none of whom submitted a final bid.

Last month, another Pluralsight investor, Akaris Global Partners, came out against the deal, arguing that the purchase price undervalued the company.

Eminence said the disclosures around the deal showed the software company “feverishly” instituting a sales process after the approach from Vista. Less than four weeks later, it demanded interested parties submit final bids -- with the exception of its original suitor.

“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,” Sandler said.

Eminence has also made a formal books and records request to get additional details around the sale process.

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