Verizon Taken to Court For its 130 Billion Deal With Vodafone

By admin Feb 8, 2021, 10:36:47 AM , In Events Updates
Verizon Taken to Court For its 130 Billion Deal With Vodafone

Last week, Verizon and Vodafone, finalized a huge deal worth 130 billion. According to the deal, Vodafone sold 45% of its stake in the Verizon wireless back to the US business. This deal is considered as one of the biggest deal of the decade. However, a Verizon shareholder is aiming to derail this deal by launching a lawsuit to block Verizon’s acquisition of Vodafone’s share of the company.

According to the reports, a Verizon investor Natalie Gordan believes that the prize of the deal is very high. She has filed a lawsuit seeking to void the deal.  Just three days after the transaction the lawsuit was filed in the New York State Court on Thursday.

Although, the deal has been considered as a positive move by the industry experts, Natalie Gordan said that the shareholders are being “shortchanged” the purchase. Verizon will pay $59 billion in cash and $60 billion in stock. Gordan said ‘’it is evident that Verizon has overpaid.” She also pointed in the immediate decline in the Verizon’s share price to $45.08 on September 3, which was the first trading day after the deal was announced. The share price fell from a peak of $48.60 on August 29, when the news of the deal surfaced. The lawsuit characterized the 7.2 % decline as almost 10%.

The lawsuit now seeks class-action status and has named the Chief Executive Lowell McAdam and 12 other directors as defendants for breaching the fiduciary duties. The lawsuit seeks to force Verizon to void the purchase or improve terms and make the individual defendants to pay damages.

However, Randal Milch in response to this lawsuit says, “We believe this lawsuit is entirely without merit, and Verizon intends to defend itself vigorously.”On the other hand, Vodafone declined to comment on the emerging scenario.

Class action lawsuits are common in the US and fall futile without having any real impact. However, they do give alarming signals to the companies before they forge ahead with their deals.

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