Barnes & Noble Hit with Securities Class Action Over ‘Materially Incomplete’ Merger Solicitation Statement

New to ClassAction.org? Read our Newswire Disclaimer

The acquisition of Barnes & Noble by affiliates of Elliott Advisors (UK) Limited, Chapters HoldCo Inc. and Chapters Merger Sub announced June 7 is at the center of a proposed class action filed against the bookseller and its board of directors.

According to the lawsuit, the terms of the merger agreement between Barnes & Noble and Chapters stipulated that the former’s stockholders would receive $6.50 per share of common stock in their possession. On July 9, however, the defendants submitted what the lawsuit alleges was a materially incomplete solicitation statement that allegedly failed to include critical information on Barnes & Noble’s financial projections, among other details.

Proper disclosure of a company’s projected financial information provides stockholders with a basis to not only project a company’s future performance but to better understand a financial advisor’s or advisors’ analyses in support of a proposed transaction, the lawsuit says. The Barnes & Noble solicitation statement, the suit says, failed to disclose crucial information with regard to analyses performed by Evercore Group L.L.C. and Guggenheim Securities, as well as information on the two advisors’ potential conflicts of interests and the amount of compensation Guggenheim received for its services.

The inclusion of the information reportedly omitted from the defendants’ registration statement “would significantly alter the total mix of information available” to Barnes & Noble stockholders, the complaint states.