(CN) - DuPont Fabros Technology Inc. is set to be acquired by fellow data center company Digital Realty Trust Inc. for $7.6 billion but investors claim they're in the dark due to lack of information and unable to determine the fairness of the deal.
Filed in the U.S. District Court for Columbia by investor William Lawrence, the lawsuit alleges that DuPont directors filed an "incomplete and misleading" registration statement with the Securities Exchange Commission.
The deal was announced on June 8, 2017, and DuPont investors are set to receive a fixed exchange ratio of 0.0545 Digital Realty shares for each share of DuPont. Based on DuPont's closing price that day, the offer represents a 14.9% premium.
According to investors, in an effort to convince them to vote in favour of the deal, Dupont directors omitted crucial information about the state of the company's finances.
"It is imperative that the material information that has been omitted from the S-4 [registration statement] is disclosed to the company's stockholders prior to the forthcoming stockholder vote so that they can properly exercise their corporate suffrage rights," the lawsuit states.
Investors claim the offer price is inadequate given DuPont's recent financial performance and prospects for future growth, having reported a 14.4% increase in revenue for fiscal 2106.
The lawsuit seeks to stop the deal until the missing information is disclosed. Investors are represented by Donald J. Enright of Levi & Korsinsky, LLP in Washington, D.C.
Of counsel: Nadeem Faruqi and James M. Wilson, Jr. of Faruqi & Faruqi, LLP in New York.