(CN) - WMS Industries shareholders are challenging a takeover of the company in a shareholder class action lawsuit.
According to shareholder Chen Yang, who owns over 10,000 shares, the deal undercuts the company's true value. "Each of the individual defendants breached their fiduciary duties owed to WMS and its stockholders in furtherance of their plan to protect and advance their own interests, at the expense of and to the detriment of WMS and its public stockholders," the complaint states. "Among other things, the individual defendants have agreed to sell the company at an unfairly low price."
Yang said WMS directors and executive "have clear and material conflicts of interest and are acting to better their own interests and the interests of WMS's other senior managers and directors at the expense of the company and its public shareholders."
"Defendants have initiated a process to sell WMS that undervalues the company and vests them with benefits that are not shared equally by 'WMS's public shareholders - a clear effort to take advantage of the temporary depression in 'WMS's stock price," the complaint states. "In addition, by agreeing to the proposed transaction. Defendants have capped the price of WMS at a price that does not adequately reflect the company's true value."
The prominant law firm Tripp Levy PLLC represents the class. Tripp Levy PLLC 877-772-3975
yes...i saw a similar story as well....here it is:
WMS Industries Inc., the maker of gaming and video-lottery machines, was sued by a shareholder over claims the company’s proposed $1.5 billion acquisition by Scientific Games Corp. is unfair.
The proposed deal is the product of an “opportunistic process” in which WMS directors “unreasonably” agreed to an unfair price, lawyers for WMS investor David Shaev said in a complaint made public today in Delaware Chancery Court. The complaint, which seeks to bar the transaction, also names Scientific Games as a defendant.
“There is no indication that the purchase price adequately reflects the many synergies that would result from the merger of the two companies,” lawyers for Shaev said in the complaint. “The structure of the proposed acquisition does not provide for adequate value for the company.”
Scientific Games, which is 38 percent owned by billionaire Ron Perelman, announced Jan. 31 that it would pay $26 a share to acquire WMS to expand its offerings for casinos. The deal is the biggest announced in leisure and recreational products in almost two years, according to data compiled by Bloomberg. The combination would create a global supplier of lottery equipment and slot machines.
Shaev accused WMS directors of failing to reject the inadequate offer and failing to seek other potential bidders for the company. Those actions artificially depressed the value of WMS stock, according to the complaint.
Shaev is seeking to represent all WMS shareholders in his bid for a court order blocking the deal.
Aimee Remey, a Scientific Games spokeswoman, and Mollie Cole, a spokeswoman for WMS, didn’t immediately return phone and e-mail messages seeking comment on the complaint.
The case is Shaev v. WMS Industries Inc., CA8279, Delaware Chancery Court (Wilmington.)
The law firm is Tripp Levy PLLC at 1-877-772-3975