Robbins LLP: Acquisition of Electro Rent Corporation (ELRC) by Platinum Equity LLC May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Electro Rent Corp. (NASDAQ: ELRC) by Platinum Equity LLC. On May 31, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Platinum Equity will acquire Electro Rent. Under the terms of the agreement, Electro Rent shareholders will receive $13.12 in cash for each share of Electro Rent common stock.
Is the Proposed Acquisition Best for Electro Rent and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Electro Rent is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $13.12 merger consideration is significantly below the target price of $15.00 set by an analyst at Sidoti & Company LLC on April 8, 2016. In the last three years, Electro Rent traded as high as $21.58 on November 29, 2013, and most recently traded above the merger consideration – at $13.20 – on February 27, 2015.
In light of these facts, Robbins LLP is examining Electro Rent’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.
Electro Rent 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.
Electro Rent 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.