AboveNet, Inc.

Robbins Umeda LLP Announces an Investigation of AboveNet, Inc.

Shareholder rights firm Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by members of the board of directors of AboveNet, Inc. (NYSE: ABVT) in connection with their efforts to sell the company to Zayo Group, LLC.  Concerned shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly.  You can also contact attorney Gregory E. Del Gaizo at (800) 350-6003.

On March 19, 2012, AboveNet announced that it had entered into a definitive merger agreement to be acquired by Zayo.  According to the terms of the deal, Zayo will acquire all outstanding shares of the company through an all-cash transaction.  Pursuant to the agreement, AboveNet shareholders will receive $84.00 for each share of the company they own.  The transaction is expected to close in mid-2012.

Robbins Umeda LLP’s investigation focuses on whether AboveNet’s board is undertaking a fair process to obtain maximum value and adequately compensate shareholders in light of the company’s recent financial results.  Specifically, on February 28, 2012, AboveNet reported financial results for the fourth quarter of fiscal year 2011 that exceeded analyst expectations.  The company reported diluted earnings per share of $0.90 on revenue of $121.6 million, while analysts polled by Bloomberg had only been expecting diluted earnings per share of $0.62 on revenue of $120.7 million.  Furthermore, at least two leading market analysts have released target prices for AboveNet that value the company’s stock between $85.00 and $86.00 per share, considerably higher than the value currently being offered by Zayo as a part of the proposed transaction.

Notably, the transaction represents only a 13.13% premium for shareholders, based on AboveNet’s March 16, 2012 closing price.  According to data from Bloomberg, in 88 transactions comparable to the AboveNet acquisition over the past 3 years, buyers have paid an average premium of over 49.97% and an average EBITDA multiple of 23.90.  These figures are far in excess of the 13.13% premium and 11.10 EBITDA multiple agreed to by the board for AboveNet shareholders.

Robbins Umeda attorneys highlight that AboveNet shareholders have the option to file a class action lawsuit against the company to secure the best possible price for the company’s shareholders and the disclosure of material information to shareholders so they can vote on the transaction in an informed manner.

Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law.  The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.

 

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