The Neustar Inc (NYSE:NSR) decision to sell itself to a private investment group that include private-equity firm Golden Gate Capital is under investigation by several shareholder rights law firms.
The company is selling for $33.50 a share, suggesting a premium of 21% over the stock’s closing price a day before the deal was made public. Including assumption of debt, the acquisition values Neustar at $2.9 billion. Without including debt, the deal values Neustar at $1.8 billion.
Though the transaction is expected to close in 3Q17, questions have emerged that could delay or block completion of the transaction.
Is $33.50 price fair for Neustar shareholders?
Shareholder rights attorneys at Levi & Korsinsky have announced they are investigating the deal to find out if the buyout price of $33.50 is far for Neustar’s shareholders. Levi & Korsinsky has encouraged investors who purchased shares of Neustar before December 14, 2016 to contact it to discuss their rights in the probe.
Shareholder rights attorneys at Harwood Feffer have similarly declared they are investigating the deal to see if the board of Neustar fulfilled its fiduciary duties, especially by seeking to maximize shareholder value in agreeing to sell the company for $33.50 share. Besides, Harwood Feffer’s probe also seeks to found out if the board of Neustar is transparent about the deal.
These probes may or may not lead to class action lawsuits against Neustar and its management.
Room to accept alternative offers
Though Neustar has accepted the $33.50 offer from the group of private investors led by Golden Gate Capital, the company has a 30-day window to accept alternative takeover proposals if they are better than what Golden Gate Capital and its group have put on the table.
Although the deal has raised questions, Neustar executives believe it is a great development for the company and its shareholders.
“We believe this transaction will enable us to continue to execute against our strategy and strengthen our market position as a leader in marketing, risk, security and communication solutions,” said Neustar’s CEO Lisa Hook.
Shares of Neustar rose 21% in the last session to close at $33.45, hitting a new 52-week high of $33.50. The stock is up about 40% since the beginning of 2016.
