HOUSTON – An Oklahoma man recently filed a class action lawsuit seeking to prevent a merger of two Texas-based oil companies.
Oiltanking Partners and Enterprise Product Partners announced a plan to merge on Nov. 12 that would result in Enterprise acquiring all of Oiltanking's outstanding units.
Matthew Ellis, an Oiltanking shareholder, claims the executives at Oiltanking “breached their fiduciary duties” and that the deal undervalues Oiltanking.
Enterprise agreed to purchase Oiltanking units for $47.33 per share for a total value of approximately $1.4 billion.
Ellis' attorney, Thomas E. Bilek of the Bilek Law Firm, claims in the lawsuit that the deal represents “a meager 3.6 percent premium” on the average closing price of Oiltanking shares.
Ellis claims in the suit that the transaction was “meant to transfer Oiltanking's assets to Enterprise without paying Oiltanking's public unitholders a fair price.”
The lawsuit also claims the mean price target for Oiltanking units is $51.44, the median price is $52 and the high price reached $61. Given that strong performance, the lawsuit alleges the merger deal is inadequate.
Oiltanking shareholders would own 1.87 percent of the combined company if the merger were to go through.
U.S. District Court for the Southern District of Texas-Houston Division case number 4:14-cv-3343.