NEW YORK (TheStreet) -- Two separate law firms have announced investigations into Liberty Media Corp.'s (LMCA) proposed acquisition of Sirius XM Holdings Inc. (SIRI).
The law office of Brodsky & Smith, LLC announced Wednesday that it would investigate potential claims against Sirius XM's Board of Directors connected to the proposed Liberty acquisition. Former U.S. Securities and Exchange Commission attorney William Briscoe and the securities litigation firm of Powers Taylor LLP are also carrying out a similar investigation.
"The investigation concerns possible breaches of fiduciary duty and other violations of state law by the Board of Directors of Sirius XM for not acting in the Company's shareholders' best interests in connection with the sale process," according to Brodsky & Smith's announcement. "The transaction may undervalue the Company and will result in a loss or no gain for many Sirius XM shareholders. Sirius XM stock traded above the sale price at $4.13 per share as recently as October 22, 2013 and an analyst has set a $5.80 per share price target on Sirius XM stock."
The terms of the transaction, valued at $10.6 billion, dictate that Sirius XM shareholders would receive only 0.0760 shares of Liberty Series C common stock for each share of Sirius XM stock they own. The transaction values Sirius XM at approximately $3.68 per share.
Sirius XM's stock dipped 1% to $3.82 a share in midday trading on Wednesday with a volume of 73 million (compared to its average volume of 59.77 million), while Liberty's stock dropped 1.3% to $140.79 a share.
TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a Buy with a ratings score of B. The team has this to say about its recommendation: