The following exceprt is from an article posted in the Provo Daily Herald.
PROVO — Just days after Ancestry.com Inc. announced it planned to sell to Permira Advisers LLP, a London-based private equity firm, shareholders are suing the world’s largest family history website, saying the company passed over a better offer to buy, thus shortchanging investors.
Bloomberg News reported the lawsuit Friday, which focuses on investor John Heck’s complaint filed in the Delaware Chancery Court in Wilmington, Del.
According to Bloomberg, Heck claims, “The consideration shareholders will receive is inadequate” and they “are being unfairly cashed out” given the company’s recent performance. Heck asked the court to block the buyout as proposed and to consider awarding damages and legal fees.
A Michigan-based pension fund has filed a similar suit over the buyout.
On Monday, Heather Erickson, an Ancestry.com spokeswoman said, “On Oct. 26, 2012, we became aware of a putative stockholder class action lawsuit that was filed against Ancestry.com and Ancestry.com’s board of directors in the Delaware Court of Chancery. The lawsuit alleges, among other things, that the members of the Ancestry.com board of directors breached their fiduciary duties in connection with the approval of Ancestry.com’s acquisition by Permira. Ancestry.com and its directors believe this lawsuit is without merit.”
According to Bloomberg, lawyers for the Pontiac General Employees Retirement System, a Michigan-based pension fund, contend Spectrum Equity Investors, one of Ancestry.com’s largest shareholders with 30 percent stake in the company, has used its position to dominate company directors and push the $32-a- share offer.
Court documents state that approximately five of the nine members of the board have ties to Spectrum or senior management.
Bloomberg notes that, “at Spectrum’s insistence, Ancestry directors rejected a $35-a-share offer for the genealogy company to back Permira’s $32-a-share bid, the fund’s lawyers said in the complaint.”
