Thursday, August 24, 2017 7:07 PM PT
CDI Being Sold on the Cheap, Class Claims

     (CN) - Investors claim in a class action that CDI Corp. is being sold to affiliates of AE Industrial Partners LLC too cheaply at $8.25 per share.
     Investor Louis Scarantino filed a class action lawsuit in the U.S. District Court for Eastern Pennsylvania against CDI, a multinational company providing engineering, information technology and staffing services, several of its board members, and AE affiliates.
     Under the terms of the merger announced on July 31, 2017, private equity firm AE will acquire all of the outstanding shares of CDI common stock for $8.25 per share in cash. The purchase price represents a 36 percent premium to CDI's average closing price of $6.06 for the last 30 days of trading, but the lawsuit says statements filed with the SEC in connection to the deal left out important information about financial projections and analyses for the company. The class also claims that the SEC filing omits information regarding potential conflicts of interest of CDI's board members.
     "This information is necessary for stockholders to understand potential conflicts of interest of the board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the company's stockholders," the lawsuit states.
     The suit also takes issue with a number of deal protection devices such as a "highly restrictive fiduciary out" provision that allows CDI to pull out of the deal under "extremely limited circumstances."
     The deal has already been unanimously approved by CDI's board and is expected to close in the third quarter of 2017, making CDI a privately held company.
     Lead plaintiff Scarantino seeks to stop the merger or rescind it and set aside if the deal is consummated.
     Investors are represented by Richard A. Maniskas of RM Law, P.C. in Berwyn, Pa.
     Of counsel: Brian D. Long and Gina M. Serra of Rigrodsky & Long, P.A. in Wilmington, Del.