Investors in the energy-storage company Tesla is trying to buy for $218 million are suing to block the sale (TSLA, MXWL)

Tesla vehicles stand outside of a Brooklyn, New York showroom and service center in August.

  • Shareholders of Maxwell Technologies have filed a lawsuit seeking to block the company's acquisition by Tesla.
  • The suit accuses Maxwell directors of acting in their own interests when a better offer price could have been received.
  • Class-action lawsuits are common in mergers and acquisitions, with nearly all major deals encountering at least one suit.

Shareholders of Maxwell, the energy-storage company that Tesla recently announced plans to acquire, are suing to try to block the $218 million deal.

In a class-action lawsuit filed Tuesday in a California federal court, Kip Leggett, who bought 1,000 shares at $17.23 a piece, argues the deal "significantly undervalues" the company.

"The Board rushed through an inadequate 'sales process' in which the only end goal was a sale to Tesla," the suit said. "And in proper fiduciary measures such as a special committee and market were undertaken only after Tesla had made several bids and had threatened to end its customer relationship with Maxwell should the Company not accept its offer to purchase it."

The suit also accuses Maxwell board members of seeking "significant and immediate benefits" for themselves.

A Tesla representative declined to comment on the lawsuit. A Maxwell representative said the company did not comment on ongoing legal matters.

Class-action suits like this are common in acquisitions. Analysis by Cornerstone Research of more than 1,000 deals showed that, while on the decline, 94% of the buyouts worth $100 million or more attracted at least one lawsuit.

"Clearly, based upon these positive financial results, the Company is likely to have tremendous future success and should command a much higher consideration than the amount contained within the Proposed Transaction," the lawsuit said.

You can read the full suit here:

Maxwell Suit by on Scribd

SEE ALSO: The SEC's claim that Elon Musk is in contempt of court is highly unusual, a former SEC lawyer says

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Contributer : Tech Insider https://ift.tt/2tD06mj
Investors in the energy-storage company Tesla is trying to buy for $218 million are suing to block the sale (TSLA, MXWL) Investors in the energy-storage company Tesla is trying to buy for $218 million are suing to block the sale (TSLA, MXWL) Reviewed by mimisabreena on Wednesday, February 27, 2019 Rating: 5

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