Shareholder rights law firm Johnson & Weaver, LLP has launched an
investigation into whether the board members of Pepco Holdings, Inc.
(NYSE: POM), a mid-Atlantic utility provider, breached their fiduciary
duties in connection with the proposed $6.8 billion sale of the company
to Exelon Corporation (NYSE: EXC).
If you are a Pepco shareholder and would like additional information
concerning your legal rights, please contact Johnson & Weaver's lead
analyst Jim Baker at firstname.lastname@example.org
Pepco is one of the largest energy delivery companies in the
Mid-Atlantic region, serving about 2 million customers in Delaware, the
District of Columbia, Maryland and New Jersey. Exelon is one of the
country's largest energy providers.
On April 30, 2014, Pepco and Exelon entered into an agreement whereby
Exelon will acquire Pepco in a $6.8 billion transaction. Under the terms
of the agreement, Pepco shareholders will receive $27.25 per share in
cash. The acquisition is expected to be completed by the third quarter
of 2015, although shareholders will likely be asked to vote on the
transaction well before then.
Nationally recognied Johnson & Weaver, which focuses its practice on
shareholder rights, is investigating whether the proposed $27.25 per
share deal price represents adequate consideration, especially given the
company's recent success and promise of future growth.
"Pepco is a valuable company that has recently reported outstanding
financial results across the board," said Johnson & Weaver attorney
Scott Holleman. "Pepco's directors were required to do everything they
could to maximize shareholder value, and we don't think that the $27.25
per share deal price is adequate."
On February 28, 2014, Pepco released its 2013 year-end and fourth
quarter results, reporting a 70.6% increase in net income versus the
same period in 2012. Moreover, Pepco's quarterly earnings per share
increased 53%, from $0.15 to $0.23, versus the same period in 2012. Mr.
Holleman also explained that the company has issued several statements
about its future growth, including that Pepco Energy Services entered
into $66 million in energy efficiency contracts in 2013, an increase of
$57 million compared to 2012.
The deal price also represents a premium of just 19.6% based on Pepco's
closing price of $22.79 on April 29, 2014. This premium is significantly
below the average one day premium of over 25% for comparable
transactions in the last three years.
Johnson & Weaver is also investigating whether the Company's directors
thoroughly considered alternatives to the proposed acquisition, such as
continuing on as an independent company or pursuing a deal with another
company. In particular, Mr. Holleman explained, Pepco CEO Joseph M.
Rigby recently announced his plan to retire, so there's the possibility
that Rigby favored pursuing this transaction with Exelon rather than
executing Pepco's strategy on a standalone basis.
About Johnson & Weaver, LLP:
Johnson & Weaver, LLP is a nationally recognized shareholder rights law
firm with offices in California and New York. The firm represents
individual and institutional investors in shareholder derivative and
securities class action lawsuits. For more information about the firm
and its attorneys, please visit http://www.johnsonandweaver.com.
Attorney advertising. Past results do not guarantee future outcomes.
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