Some shareholders of Massey Energy Company (Public, NYSE:MEE) aren’t happy about the proposed takeover of Massey Energy by Alpha Natural Resources. At least three investors filed in different court three separate lawsuits against directors of Massey Energy Company alleging they breached their fiduciary duties by accepting to sell Massey Energy via an unfair process and at an unfair price.

On Saturday, January 29, 2011, Massey Energy Company (NYSE: MEE) and Alpha Natural Resources, Inc. (NYSE: ANR) announced that they signed an agreement under which Alpha Natural Resources will acquire all outstanding shares of Massey Energy common stock (MEE)in a $8.5 billion transaction. Under the terms of the proposed agreement, Massey Energy Company stockholders will receive, at the closing, 1.025 shares of Alpha Natural Resources common stock and $10.00 in cash for each share of Massey Energy Company (MEE) common stock. Based on the closing share price of Alpha Natural Resources common stock as of January 28, 2011, the agreement placed a value of $69.33 per share of Massey Energy common stock. Massey Energy Company said the offer represents a 21% premium to Massey Energy’s current share price

But all plaintiffs allege that the proposed acquisition is the result of a flawed and unfair process and the members of Massey Energy's Board of Directors, acting out of their own self-interest, negotiated and entered into an agreement with Alpha Natural Resources that is both procedurally and substantively grossly unfair to Massey's shareholders. One plaintiff said that “instead of attempting to negotiate a transaction reflecting the highest price reasonably available for the company’s stockholders, defendants spent substantial effort tailoring the proposed acquisition to meet their own specific needs and those of Alpha” Natural Resources. Procedurally, so the plaintiffs, the terms of the Proposed Acquisition virtually ensure that the Proposed Acquisition will be consummated because of onerous deal protection devices, such as a full no shop provision and a $251 million termination fee. The plaintiffs alleges that the offered value of $69.33 per MEE share is a mere 16% over Massey’s price on January 12, 2011 and over $22 per share less than the price at which Massey stock traded as recently as June 23, 2008. and therefore is unfair. Indeed shares of Massey Energy Company traded during 2008 as high as $91.19 per share
Moreover, the complaint alleges that the proposed deal is substantively inadequate because it ignores Massey Energy's past strong performance and its projected growth potential relative to Alpha Natural Resources' relatively flat stock performance. In fact Massey Energy Company has performed well for its shareholders in the past. Massey Energy Company’s 12month Total Revenue went from $2.219billion in 2006 to $2.691billion in 2009. Its Net Income went from $40.98million in 2006 to $104.43million in 2009. For the first three quarters in 2010 Massey Energy Company reported quarterly Total Revenue of $688.64million, $810.15million, and $810.20million.