Laborers Local 235 Benefits Fund, Elmsford, N.Y., filed suit against Alberto-Culver Co. claiming Unilever’s planned $3.7 billion takeover of the company will shortchange investors.
Alberto-Culver directors are obligated to get the highest price for the stock, attorneys for the $95 million fund said in the suit filed Tuesday in Delaware Chancery Court in Wilmington.
“The process leading up to the board’s decision to agree to the proposed transaction was severely flawed, and not in any way designed to elicit the most economically favorable transaction for Alberto-Culver’s shareholders,” John Kairis, a lawyer for the fund, wrote in the complaint.
Unilever agreed to pay $37.50 a share in cash for Alberto-Culver, about 19% more than the Sept. 24 closing price. The companies agreed to a $125 million fee if the deal is terminated.
The board “further reduced the possibility of a maximizing shareholder value by agreeing to a punitive $125 million termination fee,” according to the complaint.
Dan Stone, a spokesman for Alberto-Culver, said the company hadn’t seen the complaint and he couldn’t immediately comment.