Feihe International Inc (NYSE:ADY) Investor Files Lawsuit Against Takeover

If you purchased shares of the Feihe International Inc (NYSE:ADY) prior to October 3, 2012, and currently hold any of those NYSE:ADY shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Feihe International
Case Name: 
Feihe International Deal Case 10/17/2012
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: ADY
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
10/17/2012
Summary: 

Oct. 17, 2012 (Shareholders Foundation) -- An investor in shares of Feihe International Inc (NYSE:ADY) filed a lawsuit against directors in effort to stop the proposed buyout of Feihe International at $7.40 per NYSE:ADY share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:ADY investors arising out of the attempt to sell the company too cheaply via an unfair process. .

On October 3, 2012, Feihe International, Inc. (NYSE: ADY) announced that its Board of Directors has received a preliminary, non-binding proposal letter dated October 3, 2012 from Mr. You-Bin Leng, the Company's Chairman and Chief Executive Officer, and an affiliate of Morgan Stanley Private Equity Asia, the private equity arm of Morgan Stanley, to acquire all of the outstanding shares of common stock of the Company not currently owned by Mr. Leng (and possibly other rollover shareholders) in a going private transaction for $7.40 per share of common stock in cash, subject to certain conditions.

However, the plaintiff alleges that the $9.00 is grossly unfair to NYSE:ADY stockholders and undervalues the company. Indeed, at least one analyst has set the high target price for NYSE:ADY shares at $9.00 per share. Furthermore, so the plaintiff, Feihe International has recently reported excellent financial results. For instance, sales in fourth quarter 2011 increased 40% compared to fourth quarter 2010.

In addition, the plaintiff claims that the process is unfair to NYSE:ADY investors as well. Indeed, Feihe chairman and CEO You-Bin Leng owns more than 45 percent of the company.