BOSTON, Feb. 6, 2013 /PRNewswire/ -- Block & Leviton LLP ( www.blockesq.com), a Boston-based law firm representing investors nationwide, has commenced an investigation into possible breaches of fiduciary duty by the Board of Directors of Virgin Media, Inc. ("Virgin" or the "Company") (NASDAQ: VMED) concerning the proposed acquisition of the Company by Liberty Global Inc. ("Liberty") in a cash and stock transaction.
Under the terms of the proposed transaction, Virgin shareholders will receive $17.50 in cash, 0.2582 Liberty Series A shares and 0.1928 Liberty Global Series C shares for each Virgin share that they hold. Based on Liberty's Series A share price of $69.46 and Series C share price of $64.50 as of February 4, 2013, this implies a price of $47.87 per Virgin share. Total value for the transaction is estimated at approximately $16 billion. The Company's share price has increased more than 45% between June 2012 and February 2013, and the stock was likely to continue its growth well beyond the offer price. Neil Berkett, CEO of Virgin, is expected to receive at least between $65 million to $85 million upon the consummation of the sale. Currently, shareholders will collect a paltry 24% premium on the previous day's closing price. As such, it appears that the proposed offer price provides an insufficient premium to shareholders.
Block & Leviton's investigation seeks to determine, among other things, whether Virgin's Directors breached their fiduciary duties by failing to maximize shareholder value in the proposed acquisition by Liberty and the overall fairness of the process by which the Virgin Directors considered and approved the transaction.