EMC faces class action lawsuit to prevent Dell takeover

Channel NewsChannel People

The proposed legal action claims EMC has mislead shareholders and others over the deal

A class action lawsuit has been filed in the US to try and prevent Dell’s $67 billion takeover of EMC.

The Grant Law Firm has filed a class action complaint on behalf of all public stockholders of EMC Corporation, who “are or will be damaged” by a vote approving Dell’s takeover.

The lawsuit claims that the preliminary proxy statement/prospectus filed with the SEC by EMC on 14 December 2015 contains “materially false and misleading statements and omissions of material fact”.

EMC Joe Tucci CEOSpecifically, the complaint asserts that the proxy statement omits material information concerning the company’s projections, including the company’s unlevered free cash flows, GAAP revenue, gross profit, operating income, net income and EPS, and various charges.

It also asserts that the analyses of the two investment advisers who “opined upon the fairness” of the proposed transaction to EMC’s shareholders from a financial point of view, are “materially misleading” and/or “make omissions of material fact”.

The law firm is now seeking a lead plaintiff from among those it claims will be negatively affected by the deal to get the class action going.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. The law firm wants to appoint a lead plaintiff by 1 April this year.

Senior executives from both Dell and EMC have gone on the charm offensive since the acquisition was announced last year, to convince the market and the channel that the deal is beneficial for both companies.


Read also :