Acacia Communications has filed a counter-suit against Cisco in an effort to end their merger agreement. Cisco was earlier granted a restraining order by a court in Delaware prohibiting Acacia from terminating the agreement. Acacia claims Cisco has not met the conditions to complete the acquisition.
Acacia's lawsuit seeks a court ruling validating its end to the merger agreement. The company disputes Cisco's claim that the company obtained Chinese regulatory approval by the required deadline of 08 January. An email from an employee at Chinese regulator SAMR the day before the deadline "does not constitute regulatory approval, as Cisco claims", Acacia said.
Nevertheless, Acacia remains bound by the terms of the agreement due to the restraining order. This remains in place until the court hears Cisco's main arguments on whether it met the conditions of the deal. No hearing dates have been set yet in either case.
Cisco's CEO Chuck Robbins meanwhile took to Twitter to confirm the Chinese clearance. "Big thank you to SAMR for last week’s approval of our merger with Acacia," he said in a tweet. "We deeply appreciate SAMR and their timely action in this process. We agreed to a strong set of protections for Chinese customers and look forward to continuing strong engagement in China."
Acacia's share price continued to increase on the news, amid expectations it may negotiate a higher takeover price. The stock finished at USD 82.09 on 11 January, compared to the Cisco offer of USD 70.
Acacia also reported preliminary fourth-quarter results, putting revenues at USD 160-164 million and net profit at USD 31.7-35.4 million. This puts the full-year results at revenues of USD 579.3-582.3 million and net profit of USD 87.7-91.4 million, compared to respectively USD 464.7 million and USD 32.8 million in 2019.
