If you’re a betting person and you guessed Summer 2018 as to when the first lawsuit would come in to block Disney’s acquisition of 21st Century Fox, cash in your chips now.
Robert Weiss, leading other shareholders of 21st Century Fox, has filed a lawsuit on Friday in Delaware federal court, alleging that a proxy statement filed on June 28th “mits or misrepresents the company’s financial projections and the data underlying financial valuation analyses from Goldman Sachs and Centerview Partners.”
Per the report on The Hollywood Reporter’s website, the filed complaint also contends inadequate disclosure of Goldman’s potential conflicts of interest in this deal:
In short, unless remedied, 21CF’s public stockholders will be forced to make a voting or appraisal decision on the Proposed Transaction without full disclosure of all material information concerning the Proposed Transaction being provided to them.
Furthermore, the shareholder lawsuit also cites an absence of financial projections/forecasts for Hulu, as well as earnings estimates for SkyUK in future years. The objecting shareholder is said to be in want of more information about the debt. There are also concerns revolving around the role of a Goldman affiliate, including a potential conflict of interest in how said affiliate was asked to “as an underwriter, placement agent and bookrunner in connection with Fox’s possible incurrence of permanent debt financing.” This is in contrast with Goldman Sachs’ role in issuing the company’s fairness opinion.
In summary, Fox and its board are accused of various securities violations, and if the Fox-Disney transaction isn’t enjoined on a preliminary basis, the shareholder would like the deal later rescinded with an award of “rescissory damages.”