Robbins Arroyo LLP: Acquisition of Outerwall Inc. (OUTR) by Apollo Global Management LLC (APO) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Outerwall Inc. (NASDAQ: OUTR) by Apollo Global Management LLC (NYSE: APO). On July 25, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Apollo Global Management will acquire Outerwall. Under the terms of the agreement, Outerwall shareholders will receive $52.00 for each share of Outerwall common stock.
Is the Proposed Acquisition Best for Outerwall and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Outerwall is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $52.00 merger consideration is significantly below the target price of $58.00 set by an analyst at B. Riley & CO. on April 25, 2016. In the last three years, Outerwall traded as high as $85.26 on July 21, 2016, and most recently traded above the merger consideration – at $59.19 – on December 7, 2015.
On April 28, 2016, Outerwall reported strong earnings results for its first quarter 2016. Outerwall reported net income of $38.5 million for the three months ended March 31, 2016, an 8.0% increase from the same period of the prior year. Outerwall also reported diluted earnings per share from continuing operations of $2.29 for the three months ended March 31, 2016, a 2.7% increase from the same period of the prior year. Outerwall also beat analyst estimates for adjusted net income and adjusted earnings per share for the past four quarters. In commenting on these results, Outerwall Chief Executive Officer Erik E. Prusch remarked, “Outerwall delivered solid results in the first quarter, demonstrating our continued ability to generate sustainable cash flow and profitability. We will continue to leverage our valued and compelling brands, millions of loyal customers, and an unrivaled network of kiosks and retail partners.”
In light of these facts, Robbins Arroyo LLP is examining Outerwall’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Outerwall shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. Outerwall shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.