MUMBAI: An investor in Warner Music Group Corp. shares filed a lawsuit in State Court in effort to block the takeover of Warner Music Group Corp by Access Industries Inc.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties in connection the proposed takeover.
On May 6, 2011, Warner Music Group Corp. and Access Industries have announced the execution of a merger agreement under which Access Industries will acquire Warner Music Group Corp in an all-cash transaction valued at $3.3 billion. The purchase includes WMG’s entire recorded music and music publishing businesses. Warner Music Group Corp. said the purchase price of $8.25 per share represents a 34.4% premium over the volume-weighted average share price of $6.14 over the previous six months.
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However, the plaintiff alleges that the offer undervalues Warner Music Group Corp. Warner Music Group Corp. reported over the past four 12months filing periods 12months Total Revenue ranging from $2.984billion to $3.506billion.
Shares of Warner Music Group Corp. increased already on May 5 before the announcement from $7.42 per share to $7.90. Then on May 6 WMG shares rose to $8.13 per share.
Additionally Thomas H. Lee Partners L.P. and its affiliates, Bain Capital Partners, LLC and its affiliates, and Edgar Bronfman, Jr., who together hold approximately 56% of Warner Music Group’s outstanding shares, have entered already into a voting agreement with Access Industries under which those stockholders have agreed to vote their shares in favor of the merger.
