Verizon Communications Inc. had been sued by a shareholder who sought to avoid the USD130 billion buyout deal with Vodafone Group Plc. The lawsuit was filed after Vodafone sold its stake in Verizon which the shareholder claimed to be overpriced.
The lawsuit was filed in a state court in New York last Thursday. This was just after three days that the transaction was announced. Natalie Gordon said that Verizon shareholders had been "shortchanged" by the acquisition of the 45% Vodafone stake in Verizon Wireless that held around 100 million clients.
Under the deal, Verizon agreed to pay Vodafone a combination of cash and stock and other sums. The deal was worth USD59 billion in cash and USD60 billion in stock.
Verizon executive vice president and general counsel Randal Milch said, "We believe this lawsuit is entirely without merit, and Verizon intends to defend itself vigorously."
Gordon claimed that Verizon was overpaid adding that "Wall Street analysts concur" and that Moody's Investors Service downgraded Verizon's credit."
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