Robbins LLP: Acquisition of Columbia Pipeline Group Inc. (CPGX) by TransCanada Corporation (TRP) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Columbia Pipeline Group Inc. (NYSE: CPGX) by TransCanada Corp. (Toronto: TRP). On March 17, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which TransCanada will acquire Columbia Pipeline. Under the terms of the agreement, Columbia Pipeline shareholders will receive $25.50 in cash for each share of Columbia Pipeline common stock.
Is the Proposed Acquisition Best for Columbia Pipeline and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Columbia Pipeline is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $25.50 merger consideration is significantly below the target price of $29.00 set by an analyst at UBS on December 8, 2015. In the last three years, Columbia Pipeline traded as high as $33.00 on June 17, 2015, and most recently traded above the merger consideration – at $25.82 – on August 31, 2015.
On February 18, 2016, Columbia Pipeline reported strong earnings results for its fourth quarter 2015. Total operating revenues for the quarter were $358 million, an increase of 5.0% compared to the same period last year. Net income for the quarter was $75.4 million, an increase of 20.4% compared to the same period last year. In commenting on these results, Columbia Pipeline Chairman and Chief Executive Officer Robert C. Skaggs Jr. remarked, “Last year was clearly an historic one for CG – we completed a seamless separation from NiSource, secured the largest project in our company’s history and continued our focus on the flawless execution of our deep inventory of expansion and modernization projects. This is an exciting and, truly transformation, time for CPG.”
In light of these facts, Robbins LLP is examining Columbia Pipeline’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Columbia Pipeline shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Columbia Pipeline shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.