Electro Optic Systems (EOS) is considering legal action against US-based activist investor Grizzly Research following the release of a short report that criticised the ASX-listed defence manufacturer. The report, published last week, triggered a sharp fall in EOS’s share price and prompted the company to halt trading on Friday. EOS provides advanced technology systems for space and defence applications.
Grizzly Research’s report alleged that several contracts announced by EOS last year were “intentionally misleading” and “utterly unrealistic”. Trading in Electro Optic Systems was halted after its stock plunged 15.9 per cent to $6.03 on Friday morning in reaction to the report. Electro Optic Systems specialises in technology enabling observation and tracking of objects in space.
EOS has refuted the allegations made in the Grizzly Research report. In a statement released to the ASX on Tuesday, EOS stated that Grizzly Research did not contact the company prior to publishing the report. “EOS rejects the misleading, manipulatory and pejorative conclusions contained in the Grizzly Report,” the company said.
EOS is now exploring legal options in both Australia and Germany, where it also trades on the Frankfurt Open Market. “EOS is concerned that Grizzly may have acted unlawfully and breached corporations laws in Australia and Germany (where EOS trades on the Frankfurt Open Market). EOS has directed legal advisers in Australia and Germany to consider all available legal remedies.”
