SiliconBeat

Avanex, the Fremont fiber optics company that announced its acceptance in January of a deal to merge with rival Bookham of San Jose, has evidently reached a settlement with two shareholders who sued the company over the proposed merger, claiming it fails to “maximize stockholder value.”

The shareholders allege that the proxy Avanex sent to shareholders about the deal “fails to provide stockholders with material information or contains materially misleading information thereby rendering the stockholders unable to cast an informed vote on the proposed merger.”

As part of the proposed settlement, Avanex added additional information in a filing today, and also agreed to pay the plaintiff’s lawyers $231,000 to cover fees and expenses. Although the company reiterated that it did not feel the “further supplemental disclosure” was required, it said it agreed to do so to avoid “delaying or adversely affecting the merger”.

The additional information filled in details about why the company selected Banc of America Securities to advise it in the deal. Among the reasons cited was that “Avanex’s board of directors considered, among other factors, the fact that Banc of America Securities had been named a top 3 investment bank for middle market companies by Institutional Investor in December 2007 and had completed over 105 transactions in 2007.” Of course they did.

More to the point, the “board of directors also considered the familiarity of Banc of America Securities with Avanex and its business.” BofA served as the placement agent of a secondary offering of stock Avanex made in 2006. The company gave a further explanation of how the advisor reached its conclusions, how it chose other companies to consider striking deals with, and how much money the bank would be getting for its advice and help with the merger: $2.25 million, of which $1.75 million depends on the completion of the cashless merger.

Avanex also offered additional information about the members of the board’s acquisition committee, originally set up in 2006, and why they were chosen.

As for money, Avanex will pay the plaintiff’s lawyers get up to $230,000 for their time and effort. OK, everyone satisfied?