Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Monday, July 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Shareholders Fight Terremark-Verizon Merger

MIAMI (CN) - Shareholders of Terremark Worldwide say directors are selling the company too cheaply to Verizon - for $1.4 billion or $19 per share - to entrench themselves at shareholders' expense. Terremark's share price more than sextupled in the 2 years before the "unfair" buyout, shareholders say.

"Verizon's offer of $19 per share substantially undervalues the company," according to the class action in Miami-Dade County Court.

Headquartered in Miami, Terremark is a global provider of information technology infrastructure services. Its share price increased by 654 percent in past two years, from $1.87 in March 2009 to $14.10 this month.

"Terremark's directors and officers will continue in their management positions with the company after consummation of the proposed merger," lead plaintiff Norbert Shaefer says. "In light of this benefit to the board, which will not be shared with the company's shareholders, it is clear that the board members were more concerned with securing continued employment for themselves than fulfilling their fiduciary duty to maximize shareholder value."

Shaefer describes the deal as "the product of a flawed process that is designed to ensure the proposed merger between Terremark and Verizon on terms preferential to Verizon and Terremark's board members, but detrimental to plaintiff and other public stockholders of Terremark."

"Indeed, Verizon's offer of $19 per share substantially undervalues the company as is merely an attempt by Verizon to acquire Terremark for a bargain during a temporary downturn in the economy."

Shaefer also contests the "lockup provisions," which include a $52.5 million termination fee.

Defendants include Terremark Worldwide, Verizon Communications, Verizon Holdings, and 10 Terremark directors.

Shaefer wants the merger enjoined as a breach of fiduciary duty, and therefore void and unenforceable. His lead counsel is Cullin O'Brien with Robbins Geller Rudman & Dowd of Boca Raton.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...