FinishMaster, Inc. Under Investor Investigation Concerning Buyout Attempt
An investigation concerning whether the offer to take over FinishMaster, Inc. at $21 per FMST share and sale process are unfair to investors of FinishMaster, Inc. (PINK:FMST) was announced.
The investigation by a law firm concerns whether Uni-Select, Inc, its subsidiary, FinishMaster, Inc. (PINK:FMST) and certain of its officers and directors breached their fiduciary duties owed investors in FinishMaster, Inc. (PINK:FMST) in connection with the proposed takeover.
On Thursday, Dec. 9, 2010, FinishMaster, Inc. (OTC: FMST.PK) announced that its Board of Directors has approved an agreement for FinishMaster, Inc to be acquired by a subsidiary of Uni-Select, Inc. (TSX: UNS). Under the terms of the prosposed agreement shareholders of FinishMaster will receive $21.00 in cash, without interest, per share. FinishMaster, Inc representing a premium of approximately 32% to the 30-day trailing average share price of FinishMaster.
But FMST shares traded as early as April 2010 at almost $20 per share leaving investors in FMST under the current offer with only a meager premium. During 2007 FMST reached its all time high with $32.50 per share.
Therefore the investigation by a law firm concerns whether the offer undervalues FinishMaster, Inc. and the sale process is unfair to the shareholders of FinishMaster, Inc. (PINK:FMST). A potential class action lawsuit would seek to maximize the amount of money and information FinishMaster, Inc. (PINK: FMST) shareholders receive in the buyout, so the law firm. In addition FinishMaster, Inc. has performed well in the past for its shareholders. FinishMaster reported over the past four 12months filing periods from 2006 to 2009 relatively consistent Total Revenue ranging from $421.39million to $486.01million. For the past 9months FinishMaster, Inc. reported a combined nine months Total Revenue of $ $317.54million.
Therefore the investigation concerns whether the FinishMaster, Inc. Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of FinishMaster, Inc. (PINK:FMST) and breached their fiduciary duties to FinishMaster (FMST) shareholder by failing to adequately shop the Company before entering into the transaction.