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PAETEC Holding Corp. Investor Files Lawsuit In Effort To Stop The Proposed Takeover by Windstream Corporation

  • If you purchased shares of PAETEC Holding Corp. (NASDAQ:PAET) prior to the announcement and currently hold those 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
PAETEC Holding Corp.
Security
NASDAQ: PAET

Case Name
PAETEC Holding Corp Deal Case 08/08/2011
Type of Lawsuit
Mergers and Acquisition
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Summary

San Diego, Aug 08, 2011 (Shareholders Foundation) -- An investor in shares of PAETEC Holding Corp. (NASDAQ: PAET) filed a lawsuit in State Court against directors of PAETEC Holding in effort to block the proposed acquisition of PAETEC Holding Corporation by Windstream Corporation.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to PAETEC Holding (NASDAQ PAET) investors arising out of the attempt to sell PAETEC Holding Corp too cheaply via an unfair process to Windstream Corp.

On August 1, 2011, PAETEC Holding Corp. (NASDAQ:PAET) announced that Windstream Corp. (Nasdaq: WIN) has entered into an agreement to acquire PAETEC Holding Corp. (Nasdaq: PAET) in a transaction valued at approximately $2.3 billion.
Under the terms of the proposed transaction PAETEC Holding (NASDAQ:PAET) shareholders will receive 0.460 shares of Windstream Corp. common stock for each NASDAQ:PAET share owned.Based on a closing price of $ 12.21 of Windstream Corp. (Nasdaq: WIN) shares investors in PAETEC Holding (NASDAQ:PAET) stocks will receive a value of $5.61 per PAET shares they owned.

Following the announcement shares of PAETEC Holding Corp. (Public, NASDAQ:PAET) jumped from roughly $4.40 on Friday to $5.36 on Monday August 1, 2011..

However, the plaintiff claims that the $5.61offer undervalues PAETEC Holding. In fact, at least one analyst has set the high target p[rice for NASDAQ PAET stocks at $7.00 per share. Additionally, PAETEC Holding Corp. has performed well for its investors in the past. PAETEC Holding’s annual Total Revenue rose from $1.04billlion in 2007 to $1.62billion in 2010. Its first quarter Revenue increased from $390.05million last year to $495.51million this year. Furthermore, shares of PAETEC Holding Corp. grew at an exceptional growth rate. NASDAQ:PAET stocks grew from as low as $1.10 during March 2009 to as high as$4.86 in June 2011.