American Industrial Partners, the private equity firm that owns press maker Mark Andy, has launched a bid for direct imaging press builder Presstek.

AIP, through its affiliate MAI Holdings, announced its $0.50 per share cash offer on 23 August, which represented a 16.3% premium over the previous day's share price. It has entered into a definitive merger agreement with Presstek although the deal is subject to the approval of shareholders and other customary closing conditions.

However, despite the offer being unanimously approved by Presstek's board of directors and its largest shareholder, IAT Reinsurance Company, which holds 24.5% of the outstanding common stock, several US law firms have questioned the value of AIP's offer to shareholders.

Shortly after the sale was announced, New York-based lawyers Levi & Korsinsky issued a statement that they were investigating Presstek's board of directors for possible breaches of fiduciary duty "by failing to adequately shop the company before entering into this transaction and whether MAI Holdings is underpaying for Presstek shares".

Levi & Korsinsky noted that Presstek had a reported book value of $1.01 "for most of the recent quarter" and that "at least one analyst" had set a price target for the stock of $3 per share. The 52-week high for Presstek's shares was $1.49, while the low was $0.36. The shares have only traded below $0.50 per share in four of the past 12 months.

A separate joint statement from Dallas-based securities litigation firm Powers Taylor and former SEC attorney Willie Briscoe announced a similar investigation. "Due to the lack of a significant premium to the shareholders and other factors, we believe that the transaction may undervalue Presstek stock. Our lawsuit will seek to obtain the highest share price for all shareholders," said Briscoe.

Commenting on the proposed deal, Stanley Freimuth, Presstek’s chairman, president and chief executive, said: "We are excited to combine the financial resources of AIP with the strong product portfolio of Presstek. We believe that this combination will help to fuel the growth of the company, which has been challenging over the past few years as a result of the worldwide economic downturn.

"AIP is no stranger to our industry. One of its portfolio companies, Mark Andy, is the world's leading designer of narrow and mid-web flexographic equipment and aftermarket products serving the label, packaging and specialty printing markets. We look forward to working with Mark Andy in areas where it makes sense for both companies."

In the six months to 30 June 2012 Presstek made a pre-tax loss of $1.9m on revenues of $56.7m, although this was an improvement on the $3m pre-tax loss in the prior year.