A class action lawsuit has been filed by Faruqi & Faruqi LLP against Genworth Financial Inc (NYSE:GNW). The lawsuit has been filed on behalf of shareholders of Genworth Financial who have been negatively affected by the decision of the board of directors to sell the company to China Oceanwide.
Last year in October, Genworth revealed that it had entered into a merger agreement with Merger Sub, a subsidiary of Oceanwide, with a view to merging the two. In the agreement, the surviving corporation is intended to be Genworth.
Unanimous approval
The merger agreement received unanimous approval from the board and it stipulated that the amount each shareholder will get in cash per share will be $5.43 in respect of each share they hold in Genworth. With the closing price of the share October 21, 2016, having been $5.21, the premium to the offer was only 4.2 percent. An announcement of the proposed transaction was made after the last trading day of October 21, 2016.
Further, it is alleged that there is misleading and materially incomplete information about the proposed transaction and the company in the proxy statement that was filed on January 25, 2017, with the U.S. Securities and Exchange Commission. In particular, it is alleged that there was a failure by the proxy statement to offer shareholders of Genworth material information on the procedural and financial fairness of the transaction that has been proposed.
On behalf of the plaintiff
Faruqi & Faruqi is representing the plaintiff. The firm has wide experience in corporate fraud actions as well as class action lawsuits. Founded in 1995, the firm has offices in Pennsylvania, California, and Delaware and its principal office is in New York City.
Individuals who wish to be appointed as lead plaintiffs must move the court within two months. To move the court with a view to serving as a lead plaintiff will require the individual to appoint an attorney of their choosing. It is not obligatory and any member of the putative class can choose to take no action and be content to be an absent member of the class.
In Wednesday’s trading session, shares of Genworth Financial Inc rose by 4.55 percent to close the day at $3.91.
