Rigrodsky & Long, P.A. Continues Its Investigation of Graham Packaging Company Inc.’s Sale to Silgan Holdings Inc. for Shar...
21 April 2011 - 7:47AM
Business Wire
Rigrodsky & Long, P.A. announces that it is continuing to
investigate potential claims against the board of directors of
Graham Packaging Company Inc. (“Graham Packaging” or the “Company”)
(NYSE: GRM) concerning possible breaches of fiduciary duty and
other violations of law related to the Company’s entry into an
agreement to be acquired by Silgan Holdings Inc. (“Silgan”) in a
transaction valued at approximately $4.1 billion, including assumed
indebtedness. Click here to learn how to join the action:
http://www.rigrodskylong.com/news/GrahamPackagingCompany-GRM.
Under the proposed agreement, each outstanding share of Graham
Packaging common stock will be converted into the right to receive
$4.75 in cash and 0.402 shares of Silgan common stock. Based on the
closing price of Silgan stock as of April 12, 2011, the stock
component is valued at $14.81 per share and the overall transaction
is valued at approximately $19.56 per share.
The investigation concerns whether Graham Packaging’s board of
directors failed to adequately shop the Company and obtain the best
price possible for Graham Packaging’s shareholders before entering
into the agreement with Silgan.
Indeed, at the closing of the merger, the surviving corporation
will make an aggregate cash payment of $245 million pursuant to
contractual change in control provisions in the Company’s income
tax receivable agreements with an affiliate of The Blackstone Group
L.P. (“Blackstone”) and the Graham family. Blackstone already owns
approximately 61% of Graham Packaging’s outstanding stock and has
three members on the Company’s Board of Directors. In addition, the
Graham family owns approximately 12% of the Company’s outstanding
stock. Moreover, According to Yahoo! Finance, at least one analyst
has set a price target of $22.00 per share for Graham Packaging
stock.
As recent as February 10, 2011, Graham Packaging announced its
results the quarter and full year ended December 31, 2010 wherein
the Company’s CEO, Mark Burgess, commented: “Our fourth quarter
profitability exceeded our expectations[.] Our legacy business
delivered a 6.4% improvement in adjusted EBITDA over the prior year
as a result of operational improvements and our focus on
productivity. This improvement occurred despite slightly lower
volumes in our legacy business, a volume decline which was
anticipated due to challenging market conditions and inventory
destocking. Additionally, we are very pleased with the great
progress we have made integrating Liquid Container, and expect to
maximize our cost synergies.”
Mr. Burgess further commented: “We have had a terrific year at
Graham that began with our IPO in February, continued with the
establishment of operations in Asia and the acquisition of Liquid
Container, and culminated with the delivery of solid financial
results. Through improved volumes and productivity initiatives, we
grew our legacy business adjusted EBITDA by 4.6%, generated strong
free cash flow and strengthened our capital structure with the
retirement of $222.0 million in debt. We continue to see good
momentum on the technology and conversion fronts that can help us
provide value added packaging solutions for our customers. While
our progress to date has been gratifying, we are excited about what
we can deliver in 2011.”
If you own the common stock of Graham Packaging and purchased
your shares before April 13, 2011, if you have information or would
like to learn more about these claims, or if you wish to discuss
these matters or have any questions concerning this announcement or
your rights or interests with respect to these matters, please
contact Seth D. Rigrodsky, Esquire or Noah R. Wortman, Case
Development Director, of Rigrodsky & Long, P.A., 919 N. Market
Street, Suite 980, Wilmington, Delaware, by telephone at (888)
969-4242, or by e-mail to info@rigrodskylong.com.
Rigrodsky & Long, P.A., with offices in Wilmington, Delaware
and Garden City, New York, regularly litigates securities class,
derivative and direct actions, shareholder rights litigation and
corporate governance litigation, including claims for breach of
fiduciary duty and proxy violations in the Delaware Court of
Chancery and in state and federal courts throughout the United
States.
Attorney advertising. Prior results do not guarantee a similar
outcome.
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