RealD (NYSE:RLD) Investor Files LawsuiAgainst Acquisition By Rizvi Traverse Management, LLC

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Company Name(s): 
Case Name: 
RealD Deal Case 02/02/2016
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

February 5, 2016 (Shareholders Foundation) - An investor who currently holds shares of RealD (NYSE:RLD), filed a lawsuit in effort to halt the proposed takeover of RealD by Rizvi Traverse Management, LLC.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:RLD stockholders by agreeing to sell RealD too cheaply via an unfair process to Rizvi Traverse Management, LLC.

On November 9, 2015, RealD (NYSE:RLD) and Rizvi Traverse Management, LLC announced that they have entered into an agreement pursuant to which Rizvi Traverse Management, LLC will acquire RealD (NYSE:RLD for $11.00 per share, in an all-cash merger transaction.

However, the plaintiff claims that the proposed consideration NYSE:RLD shareholders will receive is grossly inadequate and undervalues RealD. Indeed, at least one analyst has set the high target for NYSE:RLD shares at $15.00 per share and NYSE:RLD shares traded in the open market as recently as July 2015 as high as $12.99 per share.

In addition, the plaintiff alleges that the process is also unfair to NYSE:RLD stockholders. Indeed, in connection with the merger agreement, the Chairman and Chief Executive Officer of RealD Michael V.Lewis has already signed customary support agreements pursuant to which he has agreed to vote his shares in favor of the merger.

On February 2, 2016, NYSE:RLD shares closed at $10.67 per share.