Pre-Paid Legal Services, Inc. investor investigation over potential buyout at $60 per share

Oct. 25, 2010 - PRLog -- After Pre-Paid Legal Services, Inc. announced that it is evaluating strategic alternatives and that it received a takeover offer at $60 per share an investigation on behalf of investors of Pre-Paid Legal Services, Inc. (Public, NYSE-PPD) over possible breaches of fiduciary duties was announced.

If you are a current investor in Pre-Paid Legal Services, Inc.  shares, and/or have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

The investigation by a law firm concerns whether Pre-Paid Legal Services, Inc. and certain of its officers and directors breach or breached their fiduciary duties owed to Pre-Paid Legal Services, Inc.  investors in connection with a potential takeover.

Pre-Paid Legal Services, Inc., located in Ada, OK, designs, underwrites and markets legal expense plans. Pre-Paid Legal’s life events legal plans (referred to as Memberships) provide for a variety of legal services. In most states and provinces, standard plan benefits include preventive legal services, motor vehicle legal defense services, trial defense services, internal revenue service (IRS) audit services and a 25% discount off legal services not specifically covered by the Membership.

On Monday, October 25, 2010, Pre-Paid Legal Services, Inc.  announced that it is evaluating strategic alternatives, including a possible sale of Pre-Paid Legal Services and alternatives that do not involve a sale, to enhance shareholder value.
But the Pre-Paid Legal Services also announced that the special committee has received an offer from a private equity firm to acquire all of the outstanding shares of Pre-Paid Legal Services’ common stock (PPD) in a merger at a price of $60.00 cash per share.

The investigation by a law firm questions whether a potential sale process and the potential price would be unfair to the shareholders of Pre-Paid Legal Services, Inc. (Public, NYSE-PPD).

Shares of Pre-Paid Legal Services shares (PPD), which traded on Friday October 22, 2010 at roughly $56 per share, jumped in response to the announcement to $63.47 per share. Thus well above the current offer at $60 per share. In addition PPD shares, which were down from its 52weekHigh of $68.66 per share, $55.98 per share in February 2008, and $68.51 per share in July 2007, traded as early as September 29, 2010 at $67.67 per share. Furthermore Pre-Paid Legal Services reported between 2006 and 2009 relatively consistent 12months total revenues ranging from $444.02million to $464.49million. Its Net Income over the same time frame ranged between $51.20million to $60.17million. Pre-Paid Legal Services reported for the first quarter 2010 $116.23million total revenue with $18.79million Net Income, and for the second quarter $114.13million in total revenue with a Net Income of $16.49million.

The investigation focuses whether the Pre-Paid Legal Services board of directors will undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Pre-Paid Legal Services, Inc.  and will breach their fiduciary duties to Pre-Paid Legal Services, Inc.  shareholder by failing to adequately shop the Company before entering into the transaction.

Those who are current investors in Pre-Paid Legal Services, Inc.  common shares, and/or have any information relating the investigation, have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

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The Shareholders Foundation, Inc. is an investor advocacy group. We do research related to shareholder issues and inform investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. At Shareholders Foundation, Inc. we are in contact with a large number of shareholders. We believe that together we can combine the interests of many investors, and use the size of our interest as leverage against the giant corporations. We offer help, support, and assistance for every shareholder. We help investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.