CNX Gas Corporation Investor Files Lawsuit Against CONSOL Energy, Inc

Those who currently are investors in shares of CNX Gas Corporation (NYSE:CXG) and purchased their shares before March 21, 2010, should contact the Shareholders Foundation, Inc.

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Company Name(s): 
CNX Gas Corporation
Case Name: 
CNX Gas Corporation Deal Case 03/29/2010
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: CXG
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
03/29/2010
Class Period End: 
03/21/2010
Summary: 

A lawsuit has been filed in Delaware State Court on behalf of current investors in CNX Gas Corporation (NYSE:CXG), who purchased their CXG shares before March 21, 2010, over alleged breach of their fiduciary duties by CONSOL Energy, Inc.

On March 21, 2010, CONSOL Energy Inc announced that it had entered into an agreement to purchase the remaining shares of CNX Gas Corporation that it does not currently own. CONSOL Energy currently owns approximately 83.3% of the approximately 151 million shares of CNX Gas common stock outstanding. According to the agreement, CONSOL Energy Inc will pay $38.25 per CXG share for the 9.5 million shares that are currently owned by investment advisory clients of T. Rowe Price Associates, Inc. and CONSOL Energy agreed to commence a tender offer for the remaining outstanding shares of CNX Gas Corp. by May 5, 2010 at a price of $38.25 per share. According to CONSOL Energy Inc the offer represents a 24% premium over the closing price on March 19, 2010. Shares of CNX Gas Corporation traded after the announcement at $38 per share, and at $31 per share days before the news.

But according to the complaint the plaintiff alleges that CONSOL Energy Inc as the controlling shareholder of CNX Gas Corp seeks to take over the remaining outstanding CXG shares through an unfair process and for an unfair price. The plaintiff alleges, among other things, that CNX Gas Corp is significantly dependent on CONSUL Energy’s business, the offer undervalues CNX Gas Corp’s recent performance and promise for substantial growth, and at least one Wall Street analyst had a price target of $43 per share.