After Progress Energy announced that its board members agreed to a merger of Progress Energy, Inc. and Duke Energy an investigation on behalf of investors in Progress Energy, Inc. (NYSE:PGN) questioning whether the offer and the sale process are unfair to PGN investors was announced.

The investigation by a law firm concerns whether certain officers and directors at Progress Energy, Inc. breached their fiduciary duty owed to the shareholders of Progress Energy, Inc. (NYSE:PGN) arising out of their attempt to merger Progress Energy with Duke Energy.

On Monday, Jan. 10, 2011, Progress Energy, Inc. (NYSE: PGN) and Duke Energy (NYSE: DUK) announced that both companies boards of directors have unanimously approved a merger agreement to combine the two companies in a stock-for-stock transaction. Under the merger agreement, Progress Energys shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock. Based on Duke Energys closing share price on Jan. 7, 2011, Progress Energy shareholders would receive a value of $46.48 per share, or $13.7 billion in total equity value.

Shares of Progress Energy, Inc. (NYSE:PGN) closed the trading day before the announcement at $44.72 and fell on Monday in response to the announcement to $43.59 per share. Thus the transaction price represents only a modest premium to Progress Energys stock price the day prior to the announcement of the transaction. Therefore investigation seeks to determine whether Progress Energy, Inc. and certain of its officers and directors breached their fiduciary duties owed to Progress Energy, Inc. (NYSE:PGN) investors by rushing into the transaction and failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Progress Energy (NYSE:PGN), specifically by entering into any transaction before adequately shop the Company. Additionally Progress Energy, Inc. performed well in the past for its shareholders. Progress Energys 12months Total Revenue went from $8.7billion in 2006 to $9.8billion in 2009. Its Net Income rose from $551million in 2006 to $836million in 2009.
For the first three quarters in 2010 Progress Energy reported a combined 9month Total Revenue of $7.869billion with a combined 9months Net Income of $731million. Thus a potential class action lawsuit would seek to maximize the amount of money and information PGN shareholders would receive in a buyout, so the law firm.