Spectra Energy Corp. (NYSE:SE) Investor Lawsuit Against Acquisition By Enbridge Inc Filed

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Company Name(s): 
Spectra Energy
Case Name: 
Spectra Energy Deal Case 10/06/2016
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: SE
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
10/06/2016
Summary: 

October 6, 2016 (Shareholders Foundation) - An investor who currently holds shares of Spectra Energy Corp. (NYSE:SE), filed a lawsuit in effort to halt the proposed takeover of Spectra Energy Corp. by Enbridge Inc for a value of approximately $40.33 per share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:SE stockholders by agreeing to sell Spectra Energy Corp. too cheaply via an unfair process to Enbridge Inc.

On September 6, 2016 Enbridge Inc. (TSX, NYSE:ENB) and Spectra Energy Corp. (NYSE:SE) announced that they have entered into a merger agreement under which Enbridge and Spectra Energy will combine in a stock-for-stock merger transaction, which values Spectra Energy common stock at approximately C$37 billion (US$28 billion), based on the closing price of Enbridge's common shares on September 2, 2016. Under the terms of the Transaction, Spectra Energy Corp. (NYSE:SE) shareholders will receive 0.984 shares of the combined company for each share of Spectra Energy common stock they own. The consideration to be received by Spectra Energy Corp. (NYSE:SE) shareholders is valued at US$40.33 per Spectra Energy share, based on the closing price of Enbridge common shares on September 2, 2016.

However, plaintiff claims that the proposed consideration NYSE:SE shareholders will receive is grossly inadequate and undervalues Spectra Energy Corp. Indeed, at least one analyst has set the high target price for NYSE:SE shares at $55.00 per share. In addition, the plaintiff alleges that the process is also unfair to NYSE:SE stockholder.