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Suit alleges ChyronHego merger unfair to shareholders

By Legal News Line | Feb 4, 2015

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A class-action lawsuit filed on Friday alleged a merger undervalues one of the companies while violating the Securities and Exchange Act of 1934.

Mike and Jill Allaria filed the lawsuit against ChyronHego, Vector CH Holdings, Vector Capital Management and CH Merger Sub alleging the merger between ChyronHego and Vector Holdings is unfair to ChyronHego shareholders.

Under the merger agreement, CH Merger Sub would merge with ChyronHego, which then would become a wholly owned subsidiary of Vector. ChyronHego shareholders would receive $2.82 per share in cash worth, with the leveraged buyout of the company estimated to be worth approximately $108 million.

The Allarias alleged that the ChyronHego board failed to inform stockholders about the terms of the sale, and stock owned by the company's CEO Johan Apel and other senior management will be exchanged for equity interests rather than cash. They also alleged the price offer per share is about 34 percent lower than the 52-week high price of $4.30 per share on Sept. 17.

The suit seeks class status for all public shareholders of ChyronHego stock since Nov. 17, which is the date the merger agreement was announced. According to the lawsuit, there were more than 40.2 million outstanding shares of the company on Nov. 17.

The Allarias are represented by J. Brandon Walker and Melissa A. Fortunato, of Kirby McInerney, LLP in  New York City, New York. 

United States District Court Eastern District of New York case number 2:15-cv-00471.

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