GLG Partners, the asset manager being bought by hedge fund firm Man Group, was sued by a shareholder who contends his stock is undervalued in the $1.6 billion takeover.
GLG announced May 17 it would be bought by Man Group for $4.50 per share, a 55% premium at the time. GLG shareholder Ron Duva sued Monday in Delaware Chancery Court claiming company directors should have sought more money.
“The timing of the proposed transaction has been engineered to take advantage of a recent decline in the trading price” and the agreement “contains provisions designed to entrench management and deter alternative offers,” Mr. Duva said.
GLG was founded in 1995 as a division of Lehman Brothers Holdings and went public in 2007. The combined company will manage about $63 billion in assets.
GLG spokeswoman Stephanie Linehan said she couldn’t immediately comment on the lawsuit.
In the lawsuit, Mr. Duva also challenges the fairness of a $48 million breakup fee GLG would have to pay Man Group if it dropped the deal and a provision that gives some GLG executives Man Group stock instead of cash for their shares.