Investors in an energy storage company Tesla wants to buy for $218 million is suing to block the sale
- Shareholders of Maxwell Technologies have filed a lawsuit to block the company's acquisition by Tesla.
- The suit accuses Maxwell directors of acting in their own interests when a better offer price could have been received.
- Class action lawsuits are common in mergers and acquisitions, with nearly all major deals encountering at least one suit.
Shareholders of Maxwell, the energy storage company that Tesla in February announced plans to acquire, are suing to block the $218 million deal.
In a class action lawsuit filed Tuesday in a California Federal Court, Kip Leggett, who bought 1000 shares at $17.23 a piece, argues the deal "significantly undervalues" the company."The Board rushed through an inadequate "sales process" in which the only end goal was a sale to Tesla," the suit reads. "And in proper fiduciary measures such as a special committee and market were undertaken only after Tesla had made several bids and had threatened to end its customer relationship with Maxwell should the Company not accept its offer to purchase it."
The suit also accuses Maxwell board members of seeking "significant and immediate benefits" for themselves.
A Tesla spokesperson declined to comment on the lawsuit. A Maxwell spokesperson said the company does not comment on ongoing legal matters.
Class action suits like this are common in acquisitions. Analysis by Cornerstone Research of more than 1,000 deals showed that, while on the decline, 94% of the buyouts worth $100 million or more, attracted at least one lawsuit.
"Clearly, based upon these positive financial results, the Company is likely to have tremendous future success and should command a much higher consideration than the amount contained within the Proposed Transaction," the lawsuit reads.
You can read the full suit here:
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