Atwood Oceanics, Inc. (NYSE:ATW) Investor Lawsuit Against Acquisition By Ensco plc Filed

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Company Name(s): 
Atwood Oceanics
Case Name: 
Atwood Oceanics Deal Case 07/13/2017
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: ATW
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
07/13/2017
Summary: 

July 13, 2017 (Shareholders Foundation) - An investor, who currently holds shares of Atwood Oceanics, Inc. (NYSE:ATW), filed a lawsuit in effort to halt the proposed takeover of Atwood Oceanics, Inc. by Ensco plc for a value of approximately $10.72 per share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:ATW stockholders by agreeing to sell Atwood Oceanics, Inc cheaply via an unfair process to Ensco plc.

On May 30, 2017, Ensco plc (NYSE: ESV) and Atwood Oceanics, Inc. (NYSE:ATW) announced that they have entered into a merger agreement under which Ensco will acquire Atwood in an all-stock transaction. Under the terms of the merger agreement, Atwood Oceanics, Inc. (NYSE:ATW) shareholders will receive 1.60 shares of Ensco plc for each share of Atwood Oceanics, Inc. (NYSE:ATW) common stock for a total value of $10.72 per NYSE:ATW share based on Ensco's closing share price of $6.70 on 26 May 2017.

However, plaintiff claims that the proposed consideration NYSE:ATW shareholders will receive is grossly inadequate and undervalues Atwood Oceanics, Inc. Indeed, at least one analyst has set the target price for NYSE:ATW shares at $15.00 per share and NYSE:ATW reached in the open market as recently as January 2017 as high as $14.05 per share. In addition, the plaintiff alleges that the process is also unfair NYSE:ATW stockholders. The plaintiff claims that the defendants agreed to preclusive deal protection devices such as a $30 million termination fee, a matching rights, and a non-solicitation clause that deter other bidders from making a superior offer for Atwood Oceanics.