Robbins LLP: Acquisition of GrafTech International Ltd. (GTI) by an Affiliate of Brookfield Asset Management Inc. (BAM) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of GrafTech International Ltd. (NYSE: GTI) by an affiliate of Brookfield Asset Management Inc. (NYSE: BAM/TSX:BAM.A). On May 18, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Brookfield will acquire GrafTech. Under the terms of the agreement, GrafTech shareholders will receive $5.05 in cash for each share of GrafTech common stock.
Is the Proposed Acquisition Best for GrafTech and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at GrafTech is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $5.05 merger consideration represents a premium of only 2.0% based on GrafTech’s closing price on May 15, 2015. This premium is significantly below the average one-day premium of nearly 28.3% for comparable transactions within the past three years. Further, the $5.05 merger consideration is below the target price of $6.00 set by an analyst at Sidoti & Company LLC on April 30, 2015. In the last three years, GrafTech traded as high as $13.01 on January 16, 2014, and most recently traded above the target price – at $5.187 – on January 2, 2015.
In addition, on April 29, 2015, GrafTech reported strong quarterly earnings results for its first quarter of 2015. In particular, the company reported operating cash flow of $23 million in the first quarter of 2015, as compared to $22 million in the same period of 2014.
In light of these facts, Robbins LLP is examining GrafTech’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.
GrafTech 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.
GrafTech 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.