An investor, who currently holds shares of Regal Entertainment Group (NYSE:RGC), filed a lawsuit in effort to halt the proposed takeover of Regal Entertainment Group. by Cineworld Group PLC is unfair.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:RGC stockholders by agreeing to sell Regal Entertainment Group cheaply via an unfair process to Cineworld Group PLC.

On December 5, 2017, Regal Entertainment Group (NYSE:RGC) announced that it has entered into a merger agreement with Cineworld Group PLC for Cineworld Group PLC to acquire Regal Entertainment Group (NYSE:RGC). Under the terms of the Agreement, Regal Entertainment Group (NYSE:RGC) stockholders are to receive $23.00 in cash for each share of Class A and Class B common stock, for a total transaction value of $5.9 billion, including the assumption of debt and net of cash acquired.

However, plaintiff claims that the proposed consideration NYSE:RGC shareholders will receive is grossly inadequate and undervalues Regal Entertainment Group. Indeed, at least one analyst has set the high price target for NYSE:RGC shares at $24.75 per share. Regal Entertainment Group reported that its annual Total Revenue rose from over $3.12 billion in 2015 to over $3.19 billion in 2016 and that its Net Income increased from $153.40 million in 2015 to $170.40 million in 2016.

In addition, the plaintiff alleges that the process is also unfair NYSE:RGC stockholders. Indeed, Global City Holdings B.V. (“GCH”) and the trustee of trusts of which Cineworld’s Chairman, Anthony Bloom, is a potential discretionary beneficiary, collectively owning approximately 28.8% of Cineworld’s ordinary shares, have already signed irrevocable undertakings to vote in favor of the transaction and rights offering.