China Advanced Construction Sued by Shareholders Over Insiders' Stock Bid
By Phil Milford – Aug 1, 2011 8:59 AM ET
China Advanced Construction Materials Group Inc. (CADC), a provider of concrete for large-scale projects, was sued by investors who say they will be shortchanged in a planned $2.65-a-share buyout by company insiders.
The company is poised for growth and directors are duty- bound to get the best possible price for shareholders, trustees for the Morris B. and Mary N. Kinder Living Trust contend in a Delaware Chancery Court lawsuit filed July 29 in Wilmington.
Stockholders “deserve to receive the maximum value for their shares through the proposed transaction,” the stock may be worth as much as $5 a share and a judge should stop the proposed buyout, the trustees said in court papers.
China ACM said last month that Chairman Xianfu Han and Vice Chairman Weili He, with more than 49 percent of the stock, had offered to buy the remaining shares at a 15 percent premium. The Beijing-based company reported $93 million in revenue last fiscal year, according to data compiled by Bloomberg.
The company has established a special committee to evaluate the proposal, it said in a July 28 statement.
John Shaw, a company spokesman in Los Angeles, said he hadn’t seen the lawsuit and couldn’t immediately comment.
China ACM, a Delaware corporation, fell 5 cents to $2.13 on July 29 in Nasdaq Stock Market trading. The shares have declined 54 percent this year.
The case is Kinder v. China Advanced Construction Materials Group Inc., CA6729, Delaware Chancery Court (Wilmington).
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