RailAmerica, Inc. (NYSE:RA) Investor Files Lawsuit Against Directors To Stop Takeover By Genesee & Wyoming Inc

If you purchased shares of RailAmerica, Inc. (NYSE:RA) prior to July 23, 2012, and currently hold any of those NYSE:RA shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Case Name: 
RailAmerica Deal Case 08/03/2012
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

August 03, 2012 (Shareholders Foundation) -- An investor in NYSE:RA shares filed a lawsuit against directors to stop the sale of RailAmerica, Inc. (NYSE:RA) shares to Genesee & Wyoming Inc at $27.50 per NYSE:RA share.

The plaintiff alleges that the directors breached their fiduciary duties owed to NYSE:RA investors arising out of the attempt to sell the company too cheaply via an unfair process to Genesee & Wyoming Inc

On July 23, 2012, Genesee & Wyoming Inc. and RailAmerica, Inc. announced that they have entered into an agreement under which Genesee & Wyoming Inc will acquire RailAmerica for an all cash purchase price of $27.50 per share.

However, the plaintiff claims that the offer is unfair to NYSE:RA stockholders and undervalues the company. In fact, at least one analyst has set the high target price for NYSE:RA at $28 per share. In addition, RailAmerica, Inc. (NYSE:RA) reported that its annual Revenue increased from $425.77million in ’09 to $551.12million in 2011 and its Net Income over the respective time frames rose from $15.84million to $36.87million. Also, shares of RailAmerica, Inc. (NYSE:RA) grew from $9.24 per share in October 2010 to over $26 per share in mid-July 2012.

Furthermore, the plaintiff alleges, that the defendants approved the transaction to the detriment of the company’s shareholders. The plaintiff says that the terms of the merger agreement, such as a no solicitation, a matching rights, and a hefty $49million termination fee provision, substantially favor Genesee & Wyoming Inc. and are calculated to unreasonably dissuade potential suitors from making competing offers.