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LoopNet, Inc. Investors File Lawsuit To Stop Takeover By CoStar Group, Inc

  • If you purchased shares of LoopNet, Inc. (NASDAQ:LOOP) and currently continue to hold those NASDAQ:LOOP 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
LoopNet, Inc.
Security
NASDAQ: LOOP

Case Name
LoopNet Deal Case 05/06/2011
Type of Lawsuit
Mergers and Acquisition
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Summary

Investors in LoopNet, Inc. (Nasdaq:LOOP) filed lawsuits in State Court in effort to block to takeover of LoopNet by CoStar Group, Inc.
According to the complaints the plaintiff allege that certain directors of LoopNet, Inc. breached their fiduciary duties in connection the proposed takeover.

On Wednesday, April 27, 2011, CoStar Group, Inc. (Nasdaq:CSGP) had announced the signing of an agreement to acquire LoopNet, Inc. (Nasdaq:LOOP). Pursuant to the merger agreement, LoopNet shareholders will receive $16.50 in cash and 0.03702 shares of CoStar Group common stock for each share of LoopNet common stock, representing a total equity value of approximately $860 million and an enterprise value of $762 million.

In response to the merger news LOOP shares increased from $14.40 on Wednesday to $18.47 on Thursday.

However, the plaintiff alleges that the proposed acquisition is the product of a flawed process that is designed to ensure the sale of LoopNet to CoStar on terms preferential to CoStar Group and the defendants. Certain LoopNet's directors, certain executive officers, and certain significant shareholders representing 32% of LoopNet's outstanding shares, have already signed a voting agreement in support of the deal. Further, the defendants agree to at least three deal protection provisions in the merger agreement, such as a “No shop”, “Matching Rights”, and a $25.8million “Termination Fee” provision, in derogation of their fiduciary duties to shareholders.

Additionally the plaintiff claims that the proposed price does not adequately value LoopNet In and its prospects. In fact, LoopNet has performed well for its investors. LoopNet recently announced strong financial results for the first quarter 2011, with revenue of $20.7 million, compared to $20.0 million in the fourth quarter of 2010, and $18.8 million in the first quarter of 2010. Furthermore, over the past four years LoopNet reported consistent 12months Total Revenue ranging between $70.73million and $86.07million. Its Net Income over the same time frame ranged from $11.75million to $21.13million.