Shareholders file suit over coal merger
WINFIELD, W.Va. (Legal Newsline) - The plaintiffs in a potential class-action lawsuit allege a coal company's board of directors has breached its fiduciary duties to its shareholders in merging with another coal company.
Damian Walker, on behalf of International Coal Group Inc. common stock shareholders, filed a lawsuit in Putnam Circuit Court against ICG, its board of directors and Arch Coal Inc. on Monday.
The plaintiffs take issue with the proposed sale of ICG to Arch for "inadequate consideration" of $14.60 per share.
On May 2, ICG and Arch issued a joint statement announcing they entered into a definitive agreement and plan of merger in connection with the proposed acquisition. Arch would acquire ICG, a Delaware corporation headquartered in Scott Depot, W.Va., in an all-cash transaction valued at $3.4 billion.
The offer price of $14.60 per share, the plaintiffs say, "materially undervalues the company and is unfair to its shareholders."
"In order to effectuate the Proposed Acquisition, the Defendants have structured the deal to provide the appearance of fairness while in reality tilting the sales process in favor of Arch," they wrote in their complaint.
To view the entire article, visit the West Virginia Record.