An investor in shares of M & F Worldwide Corp. (NYSE:MFW) filed a lawsuit in State Court against directors of M & F Worldwide Corp and its CEO and owner of MacAndrews & Forbes Holdings Inc in effort to block to merger with MacAndrews & Forbes Holdings Inc.
According to the complaint the plaintiff alleges that directors of M & F Worldwide Corp breached their fiduciary duties arising out of their attempt to sell the remaining 57% of the outstanding company shares of M & F Worldwide Corp too cheaply to MacAndrews & Forbes Holdings Inc.

On Monday, June 13, 2011, MacAndrews & Forbes Holdings Inc. announced that it has proposed a transaction pursuant to which M & F Worldwide Corp. (NYSE: MFW) would be merged with a subsidiary of M&F and all outstanding shares of common stock of MFW not owned by M&F would be converted into the right to receive $24.00 in cash per share.

MacAndrews & Forbes Holdings Inc said the proposed cash consideration represents a greater than 41% premium to the Company's closing share price on June 10, 2011.

However the plaintiff alleges that the $24 offer is inadequate. In fact shares of M & F Worldwide Corp. (Public, NYSE:MFW) jumped from $17.07 per share on Friday to $24.69 per share on Monday, June 13, 2011 and on June 17 to over $26 per share, thus well above the current offer. In addition the plaintiff claims that prior to the announcement of the buyout proposal MFW stock traded well above $24 per share. Indeed, shares of M & F Worldwide Corp. (Public, NYSE:MFW) traded as high as $26.38 per share as recently as April 7, 2011. During November 2010 NYSE: MFW shares reached even as high as $27.98 per share and in January 2010 as high as $42.25 per share.

Thus both recent trading prices prior and after the offer would leave MFW stockholders with not only a meager premium, but would ask them to hand over their stocks at a discount.

In addition the plaintiff alleges that the sale process is unfair to the MFW shareholders. In fact, MacAndrews & Forbes Holdings Inc already owns approximately 43% of the Company’s outstanding common stock. Moreover, the Proposal indicated that in M&F’s capacity as a stockholder of the Company it is interested only in acquiring additional shares of the Company and that it has no interest in selling any of its shares. Several media reports criticized the $24 offer as well. For instance, Barrons.com titled its article with “Ron Perelman Makes Cheap Bid for M&F Worldwide “ and Reuters Breakingviews titled its articles with “Ron Perelman’s Lowball Offer Deserves Skepticism”.