Southern Union Company
Robbins Umeda LLP Is Investigating the Acquisition of Southern Union Company
Robbins Umeda LLP, a shareholder rights litigation firm, is interested in helping shareholders of Southern Union Company (NYSE: SUG). The firm has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the board of directors of Southern Union in connection with their efforts to sell the company to Energy Transfer Equity, L.P. (NYSE: ETE).
On June 16, 2011, Southern Union and ETE announced that they entered into a definitive merger agreement under which ETE will acquire Southern Union. Under the terms of the agreement, which has been unanimously approved by both companies’ boards, Southern Union shareholders will be required to exchange their shares in the company for Series B shares of ETE, valued at $33.00. Once finalized, Southern Union will become a wholly owned subsidiary of ETE. The transaction is expected to be completed in the first quarter of 2012.
The investigation focuses on whether Southern Union’s board is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in light of the company’s recent positive financial results. On May 9, 2011, Southern Union reported first quarter revenue of $746.82 million, a figure that greatly surpassed analyst expectations of $525.00 million. Additionally, a number of financial analysts have released target prices for Southern Union that are higher than today’s offer price and that value the company’s stock at between $33.50 and $34.00 per share.
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