AT&T and DirecTV, who recently agreed to a $48.5 billion merger deal, were hit last week with a lawsuit filed by a DirecTV public shareholder. The investor, Teresa Silvestri, commenced the class-action suit via the Los Angeles Superior Court.
Silvestri filed on behalf of her other fellow shareholders (“all others similarly situated”, according to the filing), specifically taking aim at both DirecTV (along with its board of directors) and AT&T, as well as AT&T’s subsidiary Steam Merger Sub, LLC, the new division that DirecTV will assume upon its absorption into the AT&T behemoth. Silvestri’s suit essentially argues for a higher asking price, asserting that “DirecTV recent financial performance is indicative of a company on the rise with growth potential yet to be recognized.” Furthermore, Silvestri addresses the board members’ lack of consideration for the shareholder’s perspective: “In approving the Proposed Acquisition … the individual Defendants have breached their fiduciary duties of loyalty, good faith, due care and disclosure.”
In a nutshell, Silvestri (and, more than likely, a number of DirecTV’s other public shareholders) claims that DirecTV executives have prioritized their own wallets ahead of the well-being of both the company and its investors by “agreeing to sell DirecTV without first taking steps to ensure that [shareholders] would obtain adequate, fair, and maximum consideration under the circumstances.”
The suit’s plaintiffs have requested a jury trial, with Silvestri claiming that, without one, “the merger will be consummated, resulting in irreparable injury to [shareholders.]” The lawsuit could have the potential to force a restructuring of the merger, with more care taken to ensure just treatment of shareholders. Take a look at the official Court documents here.
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