Robbins Umeda LLP Is Investigating Wesco Merger for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, is investigating possible breaches of fiduciary duty and other violations of state law by members of the board of directors of Wesco Financial Corp. (AMEX: WSC) in connection with their efforts to sell Wesco to Berkshire Hathaway, Inc. (NYSE: BRK.A; BRK.B). The investigation seeks to determine whether Wesco’s board of directors undertook a fair process to obtain maximum value for its shareholders.
On February 7, 2011, Wesco and Berkshire Hathaway announced that they entered into a definitive merger agreement for Berkshire Hathaway to acquire the remaining 19.9% of Wesco’s common stock it does not own for book value. This amounts to approximately $386.55 per share of Wesco, at almost no premium. Wesco’s board agreed to the buyout at this price despite Wesco’s November 11, 2011, press release reporting that third quarter 2010 net income reached $17.7 million, an 80% improvement over the same period a year earlier. Further, less than a year ago, Wesco’s stock price traded as high as $416, a 17.8% above the implied consideration in the current proposed acquisition.