Funds Seek DirecTV Stock Appraisal After
$48.5B AT&T Deal
Wilmington (August 4, 2015, 2:19 PM ET) -- Two Merion Capital Group
investment funds asked the Delaware Chancery Court to appraise their
DirecTV stock late Monday after the
recent $48.5 billion merger with
AT&T Inc., opening yet another
appraisal proceeding in The First State of a high-profile deal.
The petition from Merion Capital LP and Merion Capital II LP says that the
two funds owned nearly 973,000 common shares of DirecTV between them and
received $93.3767 per unit after the massive deal with AT&T was completed
But the funds are seeking to have the Chancery Court actually determine
the value of its shares.
“Petitioners did not vote the appraisal shares, and petitioners have not
otherwise consented to the merger agreement,” the petition states. “Each
petitioner is entitled to an appraisal of its portion of the appraisal
Representatives for Merion and AT&T did not immediately respond to
requests for comment Tuesday.
Appraisal demands have gained momentum over the past few years in
Delaware, with many coming as an investment tactic from institutional
investors trying to squeeze more value out of public tie-ups, and several
well publicized deals are awaiting the results of a look under the
Chancery Court’s microscope.
Dole Food Co. chief David H.
Murdock’s $1.6 billion take-private deal for the fruit producer is the
subject of an appraisal demand by several institutional investors
as well as a challenge by
shareholders that the CEO helped orchestrate a series of moves to tank the
stock and grab the 40 percent he didn’t own on the cheap.
Dozens of investors have also petitioned for appraisal in connection with
Dell Inc.’s $25 billion go-private
deal, a case that recently saw
Vice Chancellor J. Travis Laster rule
that five asset managers are not eligible for appraisal because they
didn’t meet Delaware’s continuous ownership requirement after they
re-titled them in the name of Cede & Co., the Depository Trust Company’s
partner and nominee.
AOL Inc. merger with
Verizon Communication Inc. has
also been the subject of appraisal petitions
and the court
recently ruled that the $1.6
billion buyout of
Ancestry.com was indeed fair,
rejecting arguments the $32-per-share transaction should have been up to
The AT&T merger with DirecTV
has been baking since at least May 2014,
and finally received U.S.
Federal Communications Commission
approval in July after the companies agreed to build out
their high-speed network and to abide by some net neutrality-related
faced opposition from
Netflix Inc., a host of rivals
Dish Network Corp.,
Cogent Communications Inc. and public
interest groups, many of which argued it would increase prices for
AT&T and DirecTV have
long insisted that the tie-up
would benefit consumers, and that suggestions a merged company would
intentionally slow down video streams from other content providers were
baseless and that such a practice would drive away AT&T's own customers.
When the tie-up was announced, it came amid a wave of merger talks in the
telecom and television sectors, and one megadeal,
Comcast Corp.'s $45 billion bid to
Time Warner Cable Inc,
fell apart in April in the face
of FCC and
U.S. Department of Justice
Merion is represented by David J. Margules and Elizabeth A. Sloan of
Ballard Spahr LLP.
Counsel information for AT&T was not immediately available Tuesday.
The case is Merion Capital LP et al. v. DirecTV, case number 11361, in the
Delaware Chancery Court.
--Additional reporting by Kerry Benn, Benjamin Horney, Melissa Lipman,
Matthew Perlman and Zachary Zagger. Editing by Emily Kokoll.
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