Within hours after Marshall & Ilsley Corporation said its board agreed to a takeover of Marshall & Ilsley at a value of $7.75 per MI share an investigation for MI shareholders questioned whether the offer and sale process are unfair to investors in NYSE:MI shares.

The investigation by a law firm concerns whether Bank of Montreal , BMO Financial Group, Marshall & Ilsley Corporation and certain of its officers and directors breached their fiduciary duties owed investors in Marshall & Ilsley Corporation (NYSE:MI) in connection with the proposed takeover.

On Friday, Dec 17, 2010 Marshall & Ilsley Corporation (NYSE: MI) and BMO Financial Group (or Bank of Montreal; TSX NYSE: BMO) announced that they have entered into an agreement under which BMO Financial Group will acquire all outstanding shares of common stock of Marshall & Ilsley in a stock-for-stock transaction, valued at approximately $4.1 billion. Under the terms of the proposed agreement, each outstanding share of Marshall & Ilsley Corp will be exchanged for 0.1257 shares of Bank of Montreal (BMO) upon closing. Based on the closing share price of Bank of Montreal on the TSX of C$62.05 on December 16, 2010, the transaction values each share of Marshall & Ilsley Corporation at US$ 7.75.
Shares of Marshall & Ilsley Corporation (MI) jumped from roughly $6 to almost $7 in response to the takeover news.
But Marshall & Ilsley (MI) shares traded as early as October over $7.60 per share and during July at over $8.40 per share, leaving MI investors with practically no premium. Considering Marshall & Ilsleys trading price in April 2010, where MI shares reached $10.19 per share, and that analysts have set a price target as high as $9.50 per share for Marshall & Ilsley stock, shareholder in MI (Marshall & Ilsley) share would hand their MI shares to Bank of Montreal at a significant discount.

Therefore the investigation by a law firm concerns whether the offer is grossly unfair, inadequate, and substantially below the fair or inherent value of Marshall & Ilsley Corp. and the sale process is unfair to the shareholders of Marshall & Ilsley Corporation (NYSE:MI). A potential class action lawsuit would seek to maximize the amount of money and information Marshall & Ilsley shareholders receive in a buyout, so the law firm. Additionally in connection with the merger agreement, Marshall & Ilsley issued to Bank of Montreal an option to purchase up to 19.7% of MI common shares, thus providing Bank of Montreal with a significant interest in MI in order to vote in favor of the proposed buyout, so the law firm. Therefore the investigation concerns whether the Marshall & Ilsley Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Marshall & Ilsley Corporation (NYSE:MI) and breached their fiduciary duties to Marshall & Ilsley Corp. (MI) shareholder by failing to adequately shop the Company before entering into the transaction.