Con-way Inc (NYSE:CNW) has come under the scrutiny of a range of law firms, such as Rigrodsky & Long, P.A., A Professional Corporation and Dunnam & Dunnam, over breach of the fiduciary duties regarding its takeover deal with XPO Logistics Inc (NYSE:XPO). The company is selling its shares at a price of $47.60 per share, while the analysts targeted the price apiece at $59 per share. The transaction, which appears under-valued, has therefore attracted many law firms. Recently, XPO Logistics Inc proposed to buyout Con-Way at the price mentioned above, to which the latter agreed.
Apart from the fiduciary duties, the Board is being investigated for other law violations as well. The transaction is priced at a total of $3.0 billion, approximately. As per the terms of this deal, the Con-Way shareholders shall be eligible to receive $47.60 per share for the number of shares they have. The investigations by various law firms are concerned around the conception whether Con-Way properly shopped for the deal or not. Before agreeing to the conditions of XPO Logistics, whether or not the Con-Way tried to obtain the best value, is a matter of concern for the law firms.
It is speculated that the company’s Board of Directors failed to fulfil their duties in adequately pursuing the alternatives to this acquisition.
Class-action lawsuit in the future?
The claims have yet not begun and the investigations will take time. Con-Way Inc (NYSE:CNW) might face the collective shareholder lawsuit in the near future, if the investigations prove the possible breaches on the part of Board. This might affect not affect the deal though. Nevertheless, the transaction has already taken place and it might have an impact on the XPO Logistics future revenue and quarterly earnings.
The lawsuit will claim the highest possible price for the available stock with complete deal details disclosure as well.