Graham Packaging Company Inc Investor Investigation Over Possible Breaches Of Fiduciary Duty

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Company Name(s): 
Graham Packaging
Affected Securities: 

After Graham Packaging Company Inc announced that it will be acquired by Silgan Holdings Inc an investigation on behalf of investors of Graham Packaging Company Inc (NYSE:GRM) over possible breaches of fiduciary duty was announced.

The investigation by a law firm concerns whether certain directors and officers at Graham Packaging Company Inc or others breached their fiduciary duties in connection the proposed takeover.

On Wednesday, April 13, 2011, Graham Packaging Company Inc. (NYSE: GRM) announced the signing of an merger agreement under which Graham Packaging will be acquired by Silgan Holdings Inc. in a cash-and-stock transaction valued at $19.56 per share, or a total of approximately $4.1 billion including assumed indebtedness.
Under the terms of the proposed merger, each outstanding share of Graham Packaging common stock will be converted into the right to receive $4.75 in cash and 0.402 shares of Silgan Holdings Inc common stock, subject to the terms of the merger agreement. Based on the closing price of Silgan stock as of April 12, 2011, the stock component is valued at $14.81 per share.

In response to the takeover proposal shares of Graham Packaging Company Inc (NYSE:GRM) surged from $16.75 on Tuesday to $21.43 per share on Wednesday, April 13, 2011 Thus succeeding the current offer. GRM shares continued to increase and close last week’s trading on Friday at $22.98 per share. Analysts have set a price target as high as $22.00 per share for Graham Packaging stock.

Further Graham Packaging’s financial performance was increasing lately for its investors. Graham Packaging Company’s 12months Total Revenue increased from $2.271billion in 2009 to $2.512billion in 2010. Its Net income increased from $11.08million to $54.71million.

Therefore the investigation concerns whether the Graham Packaging Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Graham Packaging Company Inc (Public, NYSE:GRM) and breached their fiduciary duties to Graham Packaging (GRM) shareholder by failing to adequately shop the Company before entering into any transaction.
The investigation concerns also whether

would underpay for NYSE:GRM shares, thus unlawfully harming Graham Packaging (NYSE:GRM) stockholders. A potential class action lawsuit would seek to maximize the amount of money and information GRM shareholders would receive in a buyout, so the law firm.