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Pride International, Inc. investor files lawsuit in effort to block merger with Ensco plc

  • If you purchased shares of Pride International, Inc. (NYSE:PDE) prior to the announcement and continue to hold those PDE 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
Pride International, Inc.
Security
NYSE: PDE

Case Name
Pride International Deal Case 02/10/2011
Type of Lawsuit
Mergers and Acquisition
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Summary

An investor in Pride International, Inc. filed a lawsuit against Pride's directors in an effort to block the merger between Pride Intl. with Ensco plc at an alleged unfair price.
According to the class action complaint the plaintiff alleges that Pride Intl's directors breached their fiduciary duty to shareholders by agreeing to a low share price and a restrictive merger contract that would preclude other offers.
On Monday, February 7, 2011, Pride International, Inc. (NYSE: PDE) and Ensco plc (NYSE: ESV) had announced that they have entered into a merger agreement under which Ensco plc will combine with Pride Intl. in a cash and stock transaction valued at $41.60 per share based on Ensco plc's closing share price on 4 February 2011. Pride International, Inc said the implied offer price represents a premium of 21% to Pride Intl's closing share price as of the same date and a premium of 25% to the one month volume weighted average closing price of Pride.
Under the terms of the merger agreement, Pride International stockholders will receive 0.4778 newly-issued shares of Ensco plus $15.60 in cash for each share of Pride Intl. common stock.

Shares of Pride International, Inc. (Public, NYSE:PDE) rose from $34.30 per share on Friday to $40.58 per share on Monday.

But the plaintiff alleges that the offered price if grossly inadequate. Pride Intl has performed well in the past for its investors. Pride International, Inc. reported in 2007 Total Revenue of $1.329billion with a Net Income of $778.3million, in 2008 Total Revenue of $1.7026billion with Net Income of $851.1million, and in 2009 Total Revenue of $1.5942billion with a Net Income of $285.8million. Even though shares of Pride International, Inc. (PDE) traded recently at $29.05 per share, down from its 52weekHigh of $34.67 per share, PDE shares traded at $39.55 per share in August 2008, and as high as $47.79 per share in June 2008.
Furthermore the proposed acquisition of Pride Intl. by Ensco is a flawed process, so the lawsuit. The plaintiff claims the proposed transaction is unfair because a part of the merger agreement, the directors agreed to certain onerous and preclusive deal protection devices, such as a no-shop and $260million termination fee provision that operate conjunctively to make the proposed transaction a fair d’accompli and ensure that no competing offers will emerge for Pride Intl.