Multi-Fineline Electronix Inc. has sued hedge fund managers Michael Roth and Brian Stark and several of their funds after they recently took large stakes in the Anaheim company.
The maker of flexible circuit boards, which goes by M-Flex, said the complaint charges “the hedge funds and their managers have failed to provide complete and materially accurate information regarding the nature of their holdings.”
At issue seems to be an acquisition M-Flex is trying to get out of.
Earlier this year, M-Flex said it was paying $500 million to buy sister company MFS Technology Ltd. of Singapore. Both M-Flex and MFS are owned by Singapore’s WBL Corp.
In August, M-Flex said it was pulling out of the deal after MFS announced soft sales.
In M-Flex’s lawsuit, the company contends that Stark hedge funds have failed to disclose ownership of 32 million MFS shares. The funds also own 18% of M-Flex.
The funds plan to use their stakes to vote for the acquisition of MFS, according M-Flex.
“The Stark hedge funds’ ownership position in M-Flex has occurred recently and rapidly and appears to be based primarily on their interest in using this ownership position to maximize their own short-term economic gains through various hedging strategies and as a shareholder in MFS,” said Phil Harding, chief executive of M-Flex, in a statement.
The company seeks to “require the Stark hedge funds to amend their Schedule 13D/A to accurately state the nature of their investment and seeks an injunction precluding the Stark hedge funds from voting their shares in favor of” the deal, M-Flex said.
In a Sept. 12 Securities and Exchange Commission filing, Stark said it planned to vote in favor of the acquisition.
M-Flex’s stock was off more than 2% in afterhours trading.
