CNX Gas Corporation Takeover Under Investigation for Investors

If you currently hold shares of CNX Gas Corporation (NYSE:CXG), you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
CNX Gas Corporation
Affected Securities: 

CNX Gas Corporation faces multiple investigations on behalf of current investors in CNX Gas Corporation (Public, NYSE:CXG) concerning shareholder claims over possible breaches of fiduciary duty by the board of directors of CNX Gas Corporation (Public, NYSE:CXG) was announced.

The investigations by law firms focus on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of CNX Gas Corporation arising out of their attempt to sell CNX Gas Corp to CONSOL Energy, Inc. CNX Gas Corporation, located in Pittsburgh, PA, is engaged in the exploration, development, production and gathering of natural gas primarily in the Appalachian and Illinois Basins. CNX Gas Corporation reported in 2007 Total Revenue of $479.48million with a Net Income of $135.68million, in 2008 Total Revenue of $789.42million with a Net Income of $239.07million, and in 2009 Total Revenue of $683.44million with a Net Income of $164.46million.

On March 21, 2010, CONSOL Energy Inc announced that it had entered into an agreement to purchase the remaining shares of CNX Gas Corporation that it does not currently own. ONSOL Energy currently owns approximately 83.3% of the approximately 151 million shares of CNX Gas common stock outstanding. According to the agreement, CONSOL Energy Inc will pay $38.25 per CXG share for the 9.5 million shares that are currently owned by investment advisory clients of T. Rowe Price Associates, Inc. and CONSOL Energy agreed to commence a tender offer for the remaining outstanding shares of CNX Gas Corp. by May 5, 2010 at a price of $38.25 per share. According to CONSOL Energy Inc the offer represents a 24% premium over the closing price on March 19, 2010. Shares of CNX Gas Corporation traded after the announcement at $38 per share, and at $31 per share days before the news.

CXG shares reached over $41 per share in 2008, and closed at $35.45 as recently as October 20, 2010.

According to one investigation by a law firm “the transaction appears to be unfair” to current investors of CNX Gas Corporation (NYSE:CXG) because the “offer to purchase the remaining shares of CNX Gas Corporation (CXG) at $38.25 per share appears is grossly unfair, inadequate, and substantially below the fair or inherent value of CXG”. The investigations concern “whether the CNX Gas Corp. Board of Directors breached their fiduciary duties to CNX Gas Corporation (CXG) shareholders by failing to adequately shopped CNX Gas Corporation before entering into the proposed transaction and whether CONSOL Energy Inc may be underpaying for CNX Gas Corporation (CXG), thus unlawfully harming CXG shareholders”.