October 31, 2016 (Shareholders Foundation) - An investor who currently holds shares of Rackspace Hosting, Inc. (NYSE:RAX), filed a lawsuit in effort to halt the proposed takeover of Rackspace Hosting, Inc. by funds managed by affiliates of Apollo Global Management, LLC for $32.00 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:RAX stockholders by agreeing to sell Rackspace Hosting, Inc. too cheaply via an unfair process to affiliates of Apollo Global Management, LLC.

On August 26, 2016, Rackspace Hosting, Inc. (NYSE:RAX) announced that it has entered into an agreement with affiliates of certain funds (the Apollo Funds ) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, Apollo ) (NYSE: APO)to be acquired for$32.00 per share in cash.

However, plaintiff claims that the proposed consideration NYSE:RAX shareholders will receive is grossly inadequate and undervalues Rackspace Hosting, Inc. Indeed, at least one analyst has set the high target price for NYSE:RAX shares at $44.00 per share. Furthermore, Rackspace Hosting, Inc. reported that its annual Total Revenue rose from over $15.3 billion in 013 to over $2 billion in 2015 and that its respective Net Income increased from $86.74 million to $126.20 million. Shares of Rackspace Hosting, Inc. (NYSE:RAX) reached as high as $53.75 per share in May 2015. In addition, the plaintiff alleges that the process is also unfair to NYSE:RAX stockholder