DFG Patches Up with Shareholders - Analyst Blog
April 13 2012 - 10:19AM
Zacks
Delphi Financial Group Inc. (DFG) has agreed to
settle a shareholder suit filed against the company concerning its
buyout by Tokio Marine Holdings Inc. (TKOMY).
Delphi will be paying its class A shareholders and option
holders their share of pro rata payment equal to $49 million, less
plaintiffs’ counsel fees and expenses.
The deal was announced in December 2011 when Tokio Marine
expressed its intention to expand its presence in the U.S
life insurance market. Per the agreement, Class A stockholders
were to receive $43.875 per share in cash while the holders of
Class B shares were to receive a higher compensation of $52.875 per
share. Apart from the cash payment, the shareholders were also
entitled to receive a one-time special dividend of $1 per
share.
The agreement faced opposition from Delphi shareholders as they
claimed that the deal was structured in such a way that Class B
shares, held by Delphi’s CEO Robert Rosenkranz, would fetch a
higher payout in comparison to Class A shares. In January, the
agreement was tagged as unfair and consequently the shareholders
sued the company in Delaware Chancery Court in Wilmington to lock
the sale, on account of the provisions regarding “disparate
consideration.”
The judge ruled that the plaintiffs may continue with their
litigation. However, they could vote since they were already
receiving a premium for their share. The judge also said that
discontented shareholders have the right to receive monetary
compensation for Rosenkranz’s actions.
Consequently, at a special meeting held last month, Delphi
received approval from its shareholders with a total of 86.1% of
them voting in favor of the sale.
A major hurdle before the deal has been overcome and the sale is
expected to be completed by the second quarter of 2012, subject to
U.S and Japanese regulatory compliance and the fulfillment of other
customary conditions.
DELPHI FINL GRP (DFG): Free Stock Analysis Report
TOKIO MARINE HL (TKOMY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Tokio Marine (PK) (USOTC:TKOMY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tokio Marine (PK) (USOTC:TKOMY)
Historical Stock Chart
From Jul 2023 to Jul 2024