Robbins LLP: Acquisition of Precision Castparts Corporation (PCP) by Berkshire Hathaway Inc. (BRK/A) May Not Be in Shareholders’ Best Interests
Robbins LLP are investigating the proposed acquisition of Precision Castparts Corp (NYSE: PCP) by Berkshire Hathaway Inc. (NYSE: BRK/A). On August 10, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Berkshire Hathaway will acquire Precision. Under the terms of the agreement, Precision shareholders will receive $235.00 in cash for each share of Precision common stock.
Is the Proposed Acquisition Best for Precision and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Precision is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $235.00 merger consideration represents a premium of only 23.1% based on Precision’s closing price on July 10, 2015. This premium is significantly below the average one-month premium of nearly 37.4% for comparable transactions within the past five years. Further, the $235.00 merger consideration is significantly below the target price of $299 set by an analyst at BOE Securities, $252 set by an analyst at Buckingham Research Group, and $244 set by an analyst at UBS, on June 6, May 19, and April 20, 2015, respectfully. In the last three years, Precision traded as high as $275.09 on June 9, 2014, and most recently traded above the merger consideration – at $238.03 – on January 5, 2015.
Precision 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.
Precision 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.