(CN) – Shareholders claim in a class action that the acquisition of Sprint by rival T-Mobile for an estimated $59 billion is tainted by statements issued to the Securities Exchange Commission, which allegedly left out critical information.
The transaction, announced on April 29, 2018, will see T-Mobile acquire each issued and outstanding Sprint share for $6.62 in cash. The combined companies will be named T-Mobile and headquartered in Bellevue, Washington, if it comes to a close.
Sprint investors claim they’re unable to make an informed decision about whether to vote in favor of the transaction because SEC statements allegedly fail to disclose certain financial metrics including interest, taxes, depreciation and amortization pertaining to both companies.
The lawsuit also alleges that information about the financial analyses and analysts’ price targets performed by Sprint’s advisors, Raine Securities and J. P. Morgan in support of their fairness opinions were misleading.
“While the company’s shareholders could, potentially, do research on their own to determine this information, the shareholders should not have to undertake this significant project merely to obtain this material information, which the company already has readily available,” the suit states. The lawsuit lobs similar accusations against T-Mobile’s financial advisors PJT Partners and Goldman Sachs.
Sprint investors are also seeking information about other potential acquirers and whether they were given the same terms as T-Mobile.
Meanwhile, the Federal Communications Commission put the brakes on the deal while deciding whether to allow it. The merger, also under review by the U.S. Justice Department, would bring the number of wireless providers in the country from three to four.
The class is represented by John F. Edgar and Brendan M. McNeal of Edgar Law Firm LLC in Kansas City, and Carl L. Stine and Fei-Lu Qian of Wolf Popper LLP in New York.