RALEIGH – Shareholders in Raleigh-based Red Hat have had their say about a $34 billion merger with IBM today, and they have given their blessing.
According to an SEC filing, the deal was approved overwhelmingly:
The Hatters’ headquarters in downtown Raleigh was the site where votes will be tabulated about the deal, which was announced last fall. The meeting was scheduled to begin at 9 a.m., and it ended shortly thereafter.
Shareholders also approved in “a non-binding, advisory vote” compensation that will or may become payable to the named executive officers of Red Hat “in connection with the merger.”
Attendance at the meeting was limited to Red Hat investors.
“We are not able to permit attendees beyond stockholders as of the record date [Dec. 11],” Red Hat spokesperson Stephanie Wonderlick says.
Red Hat shares closed Tuesday at $175.61. The IBM offer represented a premium some 60 percent more than Red Hat shares’ trading price when the deal was announced.
IBM, which operates a large campus in Research Triangle Park and employs several thousand people across North Carolina, and Red Hat announced the deal in October.
Red Hat shareholders will receive $190 in cash per share should the deal win shareholder and other regulatory approvals.
Other items are also included in the voting.
“You also will be asked to consider and vote on (i) a proposal to approve, by means of a non-binding, advisory vote, compensation that will or may become payable to the named executive officers of Red Hat in connection with the merger and (ii) a proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the then-scheduled date and time of the special meeting,” Red Hat CEO Jim Whitehurst told shareholders in a regulatory filing.
Red Hat’s board has already endorsed the deal unanimously.
Whitehurst has said that the open source Linux and cloud services provider will operate as a separate entity within IBM. He will report directly to IBM Chair and CEO Ginni Rometty.
“The Red Hat Board of Directors, after considering the reasons more fully described in this proxy statement and after consultation with independent legal and financial advisors, unanimously determined that the terms of the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of Red Hat and its stockholders, and adopted, approved and declared advisable the execution, delivery and performance of the merger agreement, the merger and the other transactions contemplated by the merger agreement,” Whitehurst wrote in the filing.