A lawsuit was filed for investors in shares of CREDO Petroleum Corporation (NASDAQ:CRED) to stop the proposed takeover and current long-term NASDAQ:CRED stockholders should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 08/07/2012 -- An investor in of CREDO Petroleum Corporation (NASDAQ:CRED) filed a lawsuit against directors in effort to block the proposed takeover of CREDO Petroleum Corporation to Forestar Group Inc. at $14.50 per NASDAQ:CRED share.
Investors who purchased shares of CREDO Petroleum Corporation (NASDAQ:CRED) prior to June 4, 2012, and currently hold any of those NASDAQ:CRED shares have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 - 1554.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:CRED investors arising out of the attempt to sell the company at an unfair price via an unfair process.
On June 4, 2012, CREDO Petroleum Corporation (NASDAQ: CRED) announced that its board of directors has unanimously approved an agreement pursuant to which Forestar Group Inc. (NYSE: FOR) will acquire all of the outstanding shares of Credo Petroleum Corporation’s common stock for $14.50 per NASDAQ: CRED share, or approximately $146 million in the aggregate.
However, the plaintiff says that the $14.50 offer is unfair to NASDAQ:CRED stockholders and undervalues the company. In fact, CREDO Petroleum’s performance improved recently. It reported that its annual Revenue rose from $10.07million in 2009 to $16.77million in 2011 and its Net Loss of $14.45million in 2009 turned into a Net Income of $3.52million in 2011.
In addition, the plaintiff says that the process is also unfair to NASDAQ:CRED investors. The plaintiffs says that under control of the company’s chairman of the board the company contacted virtually no other parties to signing the merger agreement and brushed off other interested parties who contacted the company.
Furthermore, so the plaintiff, certain defendants have exacerbated their breaches of fiduciary duty by agreeing to lock up the proposed transaction with certain deal protection devices, such as a limited go-shop period followed by a strict no-solicitation provision, a matching rights provision, and a $5.2million termination fee provision, that preclude other bidders from making a successful competing offer for the company.
Those who are current investors in CREDO Petroleum Corporation (NASDAQ:CRED) and purchased their CREDO Petroleum Corporation shares prior to the announcement, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423
92108 San Diego