Warner Music Group Corp. Investor Investigation Over Buyout Rumors
After rumors about a potential buyout of Warner Music Group hit the market an investigation for investors of Warner Music Group Corp. (NYSE:WMG) over possible breaches of fiduciary duty was announced.
The investigation by a law firm concerns whether certain directors and officers at Warner Music Group Corp. (NYSE:WMG) or others will breach or breached their fiduciary duties in connection with the takeover rumors and in the event of a buyout.
Shares of Warner Music Group Corp. (NYSE: WMG) surged more than 23% on Friday after the New York Times reported that Warner Music Group has hired Goldman Sachs to discuss a potential buyout of the company. Bloomberg said citing a person with knowledge of Warner Music Group’s plans that it was approached by Kohlberg Kravis Roberts several weeks ago. Following those reports shares of Warner Music Group Corp. (NYSEL WMG) increased from Thursday’s closing price of $4.72per share to $6.12 on Friday.
Considering that WMG shares traded as early as April 2010 at over $8 per share and that Warner Music Group Corp. 12months Total Revenue for the four past filing periods was between $2.984billion to $3.505billion the investigation concerns whether Warner Music Group Corp. Board of Directors will undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Warner Music Group Corp. (NYSE:WMG) and will breach their fiduciary duties to Warner Music Group (WMG) shareholder by failing to adequately shop the Company before entering into any transaction. A potential class action lawsuit would seek to maximize the amount of money and information WMG shareholders would receive in a buyout, so the law firm.