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Virgin Mobile investor sues to block Sprint purchase

A shareholder has sued Virgin Mobile USA, claiming the company accepted too little in a $483 million stock buyout by Sprint Nextel.

The companies announced the acquisition a week ago, when Sprint said it would pay $5.50 a share to shareholders of Virgin Mobile.

Virgin Mobile had 5.25 million customers at the end of March.

The price is “grossly unfair” and would pay Virgin Mobile shareholders “substantially below” the fair value of the company, Virgin Mobile investor James D. Seymour claimed in a complaint filed Monday in federal court in Trenton, N.J.

“The intrinsic value of the equity of Virgin Mobile is materially greater than the consideration contemplated by the proposed merger price,” according to the complaint, which alleges a breach of fiduciary duty by Virgin Mobile directors.

Submitted by srosen on August 5, 2009 - 11:49am.
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"Grossly Unfair?"

Submitted by SprintFilings on August 5, 2009 - 4:52pm.

So some moron thinks Sprint paid "substantially below" the fair market value because they paid a 31% premium for the stock? Sprint is paying $5.50 / share when Virgin was trading at $4.21 / share before the deal. I'm glad that the "investor" is able to so accurately deduce the "fair value" of Virgin Mobile. I'll make him a deal; I'll sell him all the Virgin Mobile stock he wants a substantially higher price, say, $7 / share. Maybe that'll make him happy. Too bad we live in such a litigious society.

http://sprintfilings.blogspot.com

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