A 21st Century Fox shareholder has filed suit over Disney’s pending deal to acquire most of the company’s assets, claiming that shareholders have been given incomplete or misleading information before their vote on July 27.
The complaint by Robert Weiss (read it HERE) was filed on Friday in U.S. District Court in Delaware. It charges that the most recent offer accepted by Fox yielded a prospectus on June 28 that was incomplete. Weiss, who is seeking to stop the vote from happening, filed the suit as a class-action suit but thus far he has filed alone. It is the first such action of the months-long battle over the Fox assets, which include its film and TV studio as well as the FX Networks. (The broadcast network, local stations and Fox News Channel are staying put.)
In a comment to Deadline, Fox called the lawsuit “frivolous.”
Disney is likely to soon see competition from Comcast in its offer for Fox. The two companies have traded offers, bumping up the price by nearly $20 billion from where it stood last December, emboldened by AT&T’s legal victory over the government in its effort to acquire Time Warner.
Fox’s prospectus “omits or misrepresents” certain information, especially the role played by Goldman Sachs, who advised Fox on the merger, the complaint says. The omission of certain material, such as financial projections for Fox’s 30% stake in Hulu, are a problem, Weiss contends. “Stockholders need such information in order to make a fully informed voting or appraisal decision,” his complaint asserts. Without proper remedies, “Stockholders will be forced to make a voting or appraisal decision on the proposed transaction without full disclosure of all material information concerning the proposed transaction being provided to them.”