July 19, 2019 - Second Proposed Class Action Filed
Another proposed class action lawsuit has been filed against Barnes & Noble and its board of directors over allegations similar to those detailed on this page. That case can be read here.
The acquisition of Barnes & Noble by affiliates of Elliott Advisors (UK) Limited, Chapters HoldCo Inc. and Chapters Merger Sub announced June 7 is at the center of a proposed class action filed against the bookseller and its board of directors.
According to the lawsuit, the terms of the merger agreement between Barnes & Noble and Chapters stipulated that the former’s stockholders would receive $6.50 per share of common stock in their possession. On July 9, however, the defendants submitted what the lawsuit alleges was a materially incomplete solicitation statement that allegedly failed to include critical information on Barnes & Noble’s financial projections, among other details.
Proper disclosure of a company’s projected financial information provides stockholders with a basis to not only project a company’s future performance but to better understand a financial advisor’s or advisors’ analyses in support of a proposed transaction, the lawsuit says. The Barnes & Noble solicitation statement, the suit says, failed to disclose crucial information with regard to analyses performed by Evercore Group L.L.C. and Guggenheim Securities, as well as information on the two advisors’ potential conflicts of interests and the amount of compensation Guggenheim received for its services.
The inclusion of the information reportedly omitted from the defendants’ registration statement “would significantly alter the total mix of information available” to Barnes & Noble stockholders, the complaint states.