San Diego, CA -- (SBWIRE) -- 07/30/2012 -- An investor in shares of GeoEye Inc. (NASDAQ:GEOY) filed a lawsuit against member of the board o directors of GeoEye Inc. in effort to stop the proposed takeover of GeoEye Inc. by DigitalGlobe, Inc at a value of $20.27 per NASDAQ:GEOY share.
Investors who purchased shares of GeoEye Inc. (NASDAQ:GEOY) prior to July 23, 2012, and currently hold any of those NASDAQ:GEOY 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:GEOY investors arising out of their attempt to sell the company too cheaply via an unfair process to DigitalGlobe.
On July 23, 2012, DigitalGlobe, Inc. (NYSE: DGI) and GeoEye, Inc. (NASDAQ: GEOY) announced that the boards of directors of both companies have approved a merger agreement under which the companies will combine in a stock and cash transaction valued at approximately $900 million. Under the terms of the proposed transaction, GeoEye shareowners will have the right to elect either 1.137 shares of DigitalGlobe common stock and $4.10 per share in cash, 100% of the consideration in cash ($20.27) or 100% of the consideration in stock (1.425 shares of DigitalGlobe common stock), for each share of GeoEye stock they own, with the amount of cash and stock subject to proration depending upon the elections of GeoEye shareholders, such that aggregate consideration mix reflects the ratio of 1.137 shares of DigitalGlobe common stock and $4.10 per share in cash. Based upon the closing prices of DigitalGlobe and GeoEye as of July 20, 2012, the transaction delivers a premium of 34% to GeoEye's July 20, 2012 closing price of $15.17 per share.
The plaintiff claims that the current offer is unfair to NASDAQ:GEOY stockholders and undervalues the company. Indeed, following the takeover news NASDAQ:GEOY shares jumped from $15.15 per share on Friday to $20.43 per share on Monday and continued to increase to as high as $24.66 per share during July 27, 2012, thus well above the current offer. Furthermore, , at least one analyst has set the target price for NASDAQ:GEOY shares at $30 per share and GEOY shares traded as early as May 4, 2012 at $24.83 per share, thus well above the current offer. In fact, NASDAQ:GEOY shares traded in July 2011 as high as $41.65 per share and in February 2011 as high as $44.41 per share, more than twice the current offer.
In addition the plaintiff alleges that the proposed transaction is the product of a fundamentally flawed process that is designed to ensure the acquisition of GeoEye by DigitalGlobe on terms preferential to DigitalGlobe and GeoEye’s board members, but detrimental to all other NASDAQ:GEOY stockholders.
Those who are current investors in GeoEye Inc. (NASDAQ:GEOY) and purchased their GeoEye Inc. hares prior to the announcement, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
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