Nellore Capital, a Silicon Valley hedge fund that owns an 11 per cent stake in the Waterloo, Ont.-based cybersecurity firm, said Wednesday that Glass Lewis has sided with it, recommending shareholders vote against the private equity giant’s proposed acquisition, saying the proposed valuation is “inadequate.” The deal goes to a shareholder vote on March 23. (The Logic)

Talking point: The advisory firm’s recommendation conflicts with that of Institutional Shareholder Services, which said earlier this week it supports the deal that would merge Magnet with Thoma subsidiary Grayshift. Egan-Jones Proxy Services also recommended shareholders vote to approve the deal. Glass Lewis and ISS are the two largest proxy advisory firms, which can often influence shareholder voting decisions. In Glass Lewis’s report, which was obtained by The Logic, the firm said the timing of the proposed $44.25-per-share bid was “suboptimal” and that it represents just a 2.1 per cent premium on the stock’s 52-week trading high in mid-December. The firm also said management’s case was “unconvincing and questionably sourced” and unlikely to deliver value to investors. Magnet Forensics spokesperson Neil Desai said in a statement that Glass Lewis made “several fundamental errors and omissions in arriving at its conclusions, displaying a lack of understanding of Magnet’s business, its peers, competition and other risks to its business.”