An investor in Lubrizol Corp. filed a lawsuit against certain officers and directors of Lubrizol alleging breaches of fiduciary duty in connection with the proposed takeover of Lubrizol Corporation by Berkshire Hathaway.
According to the complaint the plaintiff alleges that the defendants attempt to sell Lubrizol for an inadequate price via an unfair process.

On Monday, March 14, 2011, The Lubrizol Corporation (NYSE: LZ) and Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) announced an agreement for Berkshire Hathaway to acquire 100% of outstanding Lubrizol Corp. shares for $135 per share in an all-cash transaction valued at approximately $9.7 billion including approximately $0.7 billion in net debt.

The Lubrizol Corporation said the offer represents a 28 percent premium over Lubrizol's closing price on Friday, March 11, 2011, and is also 18 percent higher than Lubrizol's all-time high share closing price

Indeed, shares of Lubrizol Corporation (Public, NYSE:LZ) surged from $104.34 per share to $134 per share on Monday.

However, the plaintiff claims the premium is just at 17.8% considering the trading price of Lubrizol’s stock on February 17, less than one month before the announcement. Additionally at least one financial analyst values Lubrizol’s common stock at $148 per share. Moreover, so the plaintiff, the offer grossly undervalues both Lubrizol’s intrinsic value as well as Lubrizol’s prospects for continued growth. In fact, Lubrizol Corporation has performed well for its investors in the past. Lubrizol’s 12 months Total Revenue went from $4.499billion in 2007 to $5.417billion in 2010. Its Net Income rose from $283.40million in 2007 to $732.20million in 2010.

Further defendants agreed to certain onerous and preclusive deal protection devices, such as a no solicitation and a $200million termination fee provision, that operate conjunctively to make the proposed takeover a fait accompli and ensure that no competing offers will emerge for Lubrizol.