Shaw Group Inc. shareholders have filed two lawsuits in 19th Judicial District Court in Baton Rouge seeking to halt the company’s $3 billion sale to CB&I.
The lawsuit filed by Colleen Whitmer claims, among other things, that the proposed sale was arrived at through “an unfair process and for an unfair price,” and that Shaw’s board of directors violated its fiduciary duty to shareholders in approving the deal.
Shaw’s board and executive management agreed to the deal in order to enrich themselves, the lawsuit claims.
The deal will accelerate the stock options of board members and executives on 3.6 million shares of Shaw, or 5.1 percent of the outstanding stock, it said.
Neither Shaw nor CB&I officials could be reached for comment Wednesday.
The lead attorneys on the lawsuits, Andrew Lemmon and Irma Netting in the first case and Eric O’Bell in the latter, could not be reached for comment Wednesday.
The lawsuit filed by Peter Osten said that the deal was the product of “a flawed process” and that the board violated its duties to shareholders by failing to maximize shareholder value.
CB&I has offered $41 in cash and $5 worth of CB&I stock for each share of Shaw, an engineering, construction, fabrication and environmental firm.
The $46 offer is 72 percent more than Shaw’s shares fetched the day before the deal was announced.
The Osten lawsuit says the proposed deal will deny Shaw shareholders the opportunity to benefit from the company’s valuable and profitable business and future growth in profits and earnings. Shaw shareholders will end up with only 11 percent of CB&I, the lawsuit said.
Both lawsuits request that a judge grant them class-action status.
Meanwhile, at least two other law firms specializing in class-action lawsuits have announced they are investigating possible breaches of fiduciary duty by Shaw officers and directors.