Law360.com notes that an investor is seeking to block Cumulus’ $260M Dial Global buy. Guarang Shah, a shareholder, Dial Global hit the company’s board with a proposed class action in New York state court 9/18, alleging they breached their fiduciary duties by agreeing to sell the company to Cumulus. Law360 says the law firm of Brodsky & Smith, on behalf of shareholder Shah, and Brower Piven (a Maryland firm), filed the suits in New York state court, asking for class action status on behalf of all holders of DG’s “DIAL” common stock.
Brodsky & Smith allege the board breached its fiduciary duty by accepting and recommending compensation less than the true value of the company. Brower Piven note the 15.5 cent per share price Cumulus is paying is too low and the process was “designed to ensure the acquisition on terms preferential to Cumulus and company insiders.”