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By Jonathan Stempel
NEW YORK (Reuters) – Alleghany (NYSE:) Corp, which agreed final month to be acquired by Warren Buffett’s Berkshire Hathaway (NYSE:) Inc, was sued on Wednesday by a shareholder who accused the insurance coverage firm of creating insufficient and deceptive disclosures in regards to the $11.6 billion takeover.
In a criticism filed in Manhattan federal court docket, the plaintiff Shiva Stein stated Alleghany failed in a proxy assertion to adequately clarify the monetary foundation for the “equity opinion” issued by its bankers at Goldman Sachs (NYSE:), which assessed whether or not the deal was honest to shareholders.
Absent further disclosures, “plaintiff will probably be unable to make a fully-informed resolution relating to whether or not to vote in favor of the proposed transaction, and he or she is thus threatened with irreparable hurt,” the criticism stated.
Stein needs to dam Berkshire from shopping for New York-based Alleghany except extra disclosures are made, and in addition seeks unspecified damages. The New Jersey resident has not argued that the takeover worth is just too low.
Alleghany didn’t instantly reply to requests for remark. A lawyer for the plaintiff didn’t instantly reply to an analogous request. Berkshire isn’t a defendant.
Shareholders like Stein usually sue to dam company mergers after they discover the phrases unfair or the disclosures too sparse.
On April 1, Stein sued Mandiant Inc to dam the cybersecurity firm’s $5.4 billion takeover by Alphabet (NASDAQ:) Inc’s Google, additionally citing an alleged lack of disclosures to assist a Goldman equity opinion.
Berkshire agreed on March 21 to pay $848.02 per share for Alleghany, a 25% premium.
Goldman’s equity opinion referred to as that worth “honest from a monetary viewpoint” to Alleghany shareholders.
The acquisition would broaden Berkshire’s giant portfolio of insurers, together with Geico and Common Re. It could additionally reunite Buffett with Alleghany Chief Government Joseph Brandon, who led Common Re from 2001 to 2008.
The case is Stein v Alleghany Corp et al, U.S. District Court docket, Southern District of New York, No. 22-03057.
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