Trulia Inc (NYSE:TRLA) Investor Files Lawsuit Over Alleged Wrongdoing In Acquisition By Zillow, Inc

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Company Name(s): 
Trulia
Case Name: 
Trulia Deal Case 08/11/2014
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: TRLA
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
08/11/2014
Summary: 

August 14, 2014 (Shareholders Foundation) - An investor, who currently holds shares of Trulia Inc (NYSE:TRLA) filed a lawsuit in effort to halt the proposed takeover of Trulia Inc by Zillow, Inc.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:TRLA stockholders by agreeing to sell Trulia Inc too cheaply via an unfair process to Zillow, Inc.

On July 28, 2014, Zillow, Inc. (NASDAQ:Z) announced that it has entered into an agreement to acquire Trulia, Inc. (NYSE:TRLA) for $3.5 billion in a stock-for-stock transaction. As part of the agreement, Trulia shareholders will receive 0.444 shares of Class A Common Stock of Zillow, Inc.5 for each share of Trulia. Based on a closing price of $158.86 per Zillow share on Friday, July 25, 2014, Trulia shareholders will receive a value of approximately $70.54 per NYSE:TRLA shares they own.

However, the plaintiff claims that the offer is unfair to NYSE:TRLA stockholders and undervalues Trulia Inc. Indeed, Trulia Inc reported that its annual Total Revenue rose from $19.79 million in 2010 to $143.73 million in 2013. Shares of Trulia Inc (NYSE:TRLA) grew from $15.15 per share in November 2012 to as high as $55.68 per share on July 25, 2014.

Furthermore, the plaintiff alleges that the process is also unfair to NYSE:TRLA stockholders. Indeed, certain Trulia directors holding 7.4% of Trulia stock have already entered into voting agreements with Zillow to vote in favor of the transaction.

On August 15, 2014, NYSE:TRLA shares closed at $56.76 per share.