mail@shareholdersfoundation.com
Sprint Nextel announced on Tuesday to acquire Virgin Mobile) for $483million. Subsequently an investigation on behalf of current investors of Virgin Mobile USA, Inc. (Public, NYSE:VM), who purchased the shares before July 28, 2009, over potential breaches of fiduciary duty and other violations of state law in connection with an alleged unfair takeover price was announced.
If you are currently an investor in shares of Virgin Mobile USA, Inc. (NYSE:VM), and purchased the shares before July 28, 2009, and / or have additional information relating to the investigation, you should contact the Shareholders Foundation, Inc. at:
Email: mail@shareholdersfoundation.com
Or call us at: +1 (858) 779 - 1554
The investigations by law firms focus on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Virgin Mobile USA, Inc. (Public, NYSE:VM) arising out of their attempt to sell Virgin Mobile USA to Sprint Nextel.
Sprint Nextel Corporation (NYSE:S) and Virgin Mobile USA, Inc., (NYSE: VM) announced on Tuesday 28, 2009 that “their boards of directors have approved a definitive agreement for Sprint to acquire Virgin Mobile USA” and that “Each public stockholder, holding in aggregate approximately 39.7 million shares on a fully diluted basis or 43.3% ownership, will receive Sprint shares having a 10-day average closing price equivalent to $5.50 per Virgin Mobile USA share”. The exchange ratio is subject to the following condition. The exchange ratio for public stockholders will be based on Sprint's 10-day average closing share price ending two trading days prior to closing and the exchange ratio will be subject to a collar such that in no event will the exchange ratio be lower than 1.0630 or higher than 1.3668.
The transaction is valued at a total equity value of approximately $483 million, which includes the value of Sprint's current 13.1% fully diluted ownership interest in Virgin Mobile USA.
But according to one investigation “the transaction appears to be unfair” to current investors of Virgin Mobile USA, Inc. (NYSE:VM) “by failing to conduct an open and fair auction process for the Company” and the “offer to purchase Virgin Mobile USA for $5.5 per share appears opportunistically timed to take advantage of the current economic downturn”. Therefore the investigation is primarily focused on whether Board of Directors of Virgin Mobile fulfilled their fiduciary duties to maximize shareholder value in connection with the proposal. Another investigation calls the deal “suspicious because it appears from a review of the Company's financial statements that the inherent value of the Company's stock is greater than $5.50 per share, because Sprint already owns enough of Virgin Mobile's stock that it has the ability to dictate to Virgin Mobile the price that it wants to pay for Virgin Mobile, and also because Virgin Mobile's Board of Directors has effectively blocked companies other than Sprint from making a better offer”.
Virgin Mobile USA, Inc., located in Warren, New Jersey, is a provider of wireless communications services, offering prepaid services and postpaid services targeted at the youth market. Virgin Mobile’s voice and data plans allow its customers to talk, use text messaging, picture messaging, e-mail and instant messaging on a per usage basis or according to the terms of its monthly hybrid plans. Virgin Mobile reported in 2007 Total Revenue of $1.32542billion with a Net Income of $4.22million and in 2008 Total Revenue of $1.32349billion with a Net Income of $7.95million. Shares of Virgin Mobile USA, Inc. (Public, NYSE:VM) traded on the day before the announcement at $4.50 per share and after the announcement at $5.28 per share. VM shares reached in 2008 almost $9 per share.
Those who are currently investors in shares of Virgin Mobile USA, Inc. (NYSE:VM), and purchased the shares before July 28, 2009, and / or have additional information relating to the investigation, should contact the Shareholders Foundation, Inc. at:
Email: mail@shareholdersfoundation.com
Or call us at: +1 (858) 779 - 1554
Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
Tel:+1-(858)-
Fax:+1-(858)-
mail@shareholdersfoundation.com
www.ShareholdersFoundation.com
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