SAN DIEGO, Nov. 1, 2010 (GLOBE NEWSWIRE) -- The Shareholders Foundation, Inc. announces that an investor in CommScope, Inc. (NYSE:CTV) filed a lawsuit in State Court against CommScope directors and others alleging breaches of fiduciary duties arising out of their attempt to sell CommScope too cheaply via an unfair process to private-equity firm Carlyle Group.
Those who are current investors in CommScope, Inc. (NYSE:CTV) and purchased those CTV shares prior to October 25, 2010, should contact the Shareholders Foundation by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554.
Last Monday, CommScope confirmed discussions with the Carlyle Group regarding a potential transaction. Then on Wednesday, Oct. 27, CommScope, Inc. announced that it entered into a merger agreement with the Carlyle Group, under which Carlyle will, in a transaction valued at approximately $3.9 billion, acquire all outstanding shares of CommScope common stock for $31.50 per share in cash. CommScope said the offer represents a premium of approximately 36% over CommScope's closing stock price on Friday and a premium of approximately 39% over the average closing share price of CommScope's stock for the 30 days ended October 22, 2010.
But the plaintiff alleges that the defendants agreed to an offer that undervalues CommScope as Carlyle Group and CommScope directors, at the expense of CommScope's shareholders, are taking advantage of a drop in company shares. CTV shares are currently down from its 52 week High of $34.95, traded as recently as May 3 at $32.68, and an analyst set the price target for CTV shares at $36.00 per share. After the buyout news, CTV shares closed last week's trading on Friday at $31.66, thus above the offer. Given that the May stock price, its 52 week High, the analyst target price, and its current open market price are all above the offer, CommScope investors would under the current offer not receive any premium, but rather give their shares to Carlyle at a discount.
Furthermore the plaintiff says the sale process is unfair to CTV investors as CommScope executives are favoring the Carlyle Group over other potential bidders, also because six CommScope executives would receive almost $19 million in severance or change of control payments or both if they leave within two years of a change of control. Defendant CEO Frank Drendel alone would receive as much as $6.6 million, so the plaintiff says.
Those who are investors in CommScope (NYSE:CTV) and purchased their shares before the announcement, should contact the Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is an investor advocacy group which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
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