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LaBranche & Co., Inc. Investor Files Lawsuit To Block Takeover By Cowen Group Inc

  • If you purchased shares of LaBranche & Co., Inc. (NYSE:LAB) prior to the announcement and continue to hold those LAB shares, you have certain options and you should contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
LaBranche & Co., Inc.
Security
NYSE: LAB

Case Name
LaBranche & Co. Deal Case 02/25/2011
Type of Lawsuit
Mergers and Acquisition
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Summary

Investors in LaBranche & Co., Inc. (NYSE:LAB) shares filed a lawsuit alleging members of the board of directors of LaBranche & Co. breached their fiduciary duties arising out of their attempt to sell LaBranche & Co too cheaply via an unfair process to Cowen Group Inc
On Thursday, February 17, 2011, LaBranche & Co Inc. (NYSE: LAB) and Cowen Group, Inc. (NASDAQ: COWN) announced before the market opened a merger agreement under which Cowen Group, Inc will acquire LaBranche & Co Inc. in a stock-for-stock merger transaction valued at approximately $192.8 million. Under the terms of the agreement LaBranche & Co Inc shareholders (LAB) will receive upon closing a fixed ratio of 0.9980 of a share of Cowen Group, Inc Class A common stock for each outstanding share of LaBranche common stock. LaBranche & Co Inc said the offer represents a 16 percent premium to LaBranche & Co Inc’s closing price on February 16, 2011.

Indeed shares of LaBranche & Co., Inc. (NYSE:LAB) traded the day before the takeover news as high as $4.09 per share and rose in response to buyout proposal to $4.28 per share.
But the plaintiffs allege that they are not getting fair value and the proposed merger was designed to maximize benefits for the companies’ executives while bringing little to investors.
NYSE LAB traded in May 2010 at $5.11 and in April at almost $6 per share, leaving investors who purchased during those dates or earlier at prices over $4.75 with no premium but asking them to hand their shares over to Cowen Group, Inc at a discount.
The plaintiffs also claim that the proposed transaction is the product of a flawed process that is designed to ensure the sale of LaBranche & Co., Inc. to Cowen Group on terms preferential to Cowen Group , but detrimental to NYSE LAB shareholders.
Furthermore certain executive officers of LaBranche & Co Inc, holding approximately 12.5% of the outstanding shares of LaBranche & Co Inc, have entered into a voting agreement with Cowen Group to vote their shares in favor of the transaction, subject to the terms of the voting agreement. RCG Holding LLC, which currently holds approximately 44.5% of the outstanding shares of Cowen Group, entered into a voting agreement with LaBranche & Co. to vote its shares in favor of the transaction, subject to the terms of that voting agreement.