Ebix Inc (NASDAQ:EBIX) Investor Files Lawsuit Against Takeover By Goldman Sachs

If you purchased shares of Ebix Inc (NASDAQ:EBIX) prior to May 1, 2013, and currently hold any of those NASDAQ:EBIX shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Case Name: 
Ebix Deal Case 05/06/2013
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

May 7, 2013 (Shareholders Foundation) - An investor, who currently holds shares of Ebix Inc (NASDAQ:EBIX), filed a lawsuit in effort to stop the proposed takeover of Ebix Inc by an affiliate of Goldman, Sachs & Co. for $20.00 per NASDAQ:EBIX share.

On May 1, 2013, Ebix, Inc. announced that it has entered into a merger agreement to be acquired by an affiliate of Goldman, Sachs & Co. in a transaction valued at approximately $820 million, including the assumption of any outstanding debt. Under the terms of the agreement, Ebix shareholders will receive $20.00 per share in cash.

However, the plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:EBIX stockholders by agreeing to sell the company too cheaply via an unfair process to Goldman Sachs.

Indeed, shares of Ebix Inc (NASDAQ:EBIX) traded as high as $24.62 per share as recently as September 2012 and at least one analyst has set the high target price at $24.00 per share In addition, Ebix’s financial performance improved recently. For instance, Ebix reported that its annual Total Revenue rose from $97.69 million in 2009 to $199.37 million in 2012 and that its respective Net Income increased from $38.82 million to $70.57 million.

In addition, the plaintiff claims that the process is also unfair. The plaintiff says that the defendants agreed to preclusive deal protection devices such as a $27 million termination fee provision. Furthermore, Robin Raina and the Rennes Foundation, which together own approximately 19% of the outstanding common shares, have already entered into separate voting agreements under which they have agreed, subject to certain exceptions, to vote their respective shares in favor of the proposed transaction

NASDAQ:EBIX shares closed on May 7, 2013, at 19.54 per share.