February 21, 2014 (Shareholders Foundation) - An investor who currently holds shares of Equal Energy Ltd. (USA) (NYSE:EQU) filed a lawsuit in effort to halt the proposed takeover of Equal Energy Ltd. by Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. for $5.43 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:EQU stockholders arising out of the attempt to sell Equal Energy Ltd. too cheaply via an unfair process to Petroflow Energy Corporation and Petroflow Canada Acquisition Corp

On December 9, 2013, Equal Energy Ltd. announced that the Company has entered into a agreement with Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. (collectively defined as Petroflow ) for the cash purchase of all of the issued and outstanding common shares of Equal at a price of US$5.43 per share, on a fully-diluted basis.

However, the plaintiff alleges that the $5.43-offer is too low and undervalues Equal Energy Ltd. Indeed, NYSE:EQU shares traded prior to the takeover announcement as high as $5.63 per share on December 6, and that NYSE:EQU shares traded as high as $8.44 per shares in 2011. Furthermore, Equal energy Ltd’s performance improved lately. For instance, Equal Energy Ltd. reported that its Net Income increased from $5.37 million in 2011 to $61.83 million in 2012. Shares of Equal Energy Ltd. (USA) (NYSE:EQU) grew from $2.99 per share on January 2013 to $5.50 per share on December 5, 2013.

In addition, the plaintiff claims that the process is also unfair to NYSE:EQU investors. Indeed, all members of management of Equal Energy Ltd and its board of directors have already indicated their intention to vote their shares in favor of the Arrangement.

On February 21, 2014, NYSE:EQU shares closed at $5.35 per share.