Grimsley, filing suit in the New York County, described the offer as “an unfair off and for an unfair price”.
“The Board has breached their fiduciary duties by agreeing to the Proposed Transaction for grossly inadequate consideration,” said the complaint. “Given Virgin Media’s recent strong performance as well as its future growth prospects, the consideration shareholders will receive is inadequate and undervalues the Company.”
Specifically, the plaintiffs accuse Virgin Media of locking up the proposed transaction in a way that precludes the company from solicit other potential acquirers and of restricting the board’s room for manoeuvre giving Liberty Global five business days to match any competing bid and requiring the company to pay a termination fee of US$235 million before entering into any alternative transaction.
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