CLAYTON, Mo. (CN) – Thermadyne Holdings is selling itself too cheaply to Irving Place Capital, shareholders claim in a class action in St. Louis County Court. The class claims company directors sold out for $15 a share though the stock hit $15.19 the day before the deal was announced.
Named plaintiff Robert Israeli says the merger offer, announced on Oct. 5, was far too cheap, given Thermadyne’s tremendous growth. Israeli says Thermadyne quadrupled its growth in the second quarter of 2010 and is on pace for a record-breaking year.
“Amazingly, despite this growth, the $15.00 per share offer actually represents a discount to Thermadyne’s stock price high on October 4, 2010 – the day before the announcement – of $15.19,” the complaint states. “Indeed, this scenario represents the rare case where a company hits its 52-week high based on record earnings, then agrees to sell itself at a discount the next day.”
Israeli says Thermadyne’s board breached its duty to shareholders.
St. Louis-based Thermadyne is makes welding and cutting products.
The class wants the merger enjoined and Thermadyne’s board ordered to maximize shareholder value and to provide all materials to help shareholders make informed decisions about whether to tender their shares in any merger. It is represented by Tim Dollar with Dollar, Burns & Becker in Kansas City, Mo.