On Wednesday, an individual stockholder sued Loral Space & Communications Inc. and members of its board of directors for securities violations in connection with the company’s proposed merger with Telesat Corporation and its subsidiaries.
The Southern District of New York complaint alleged that the satellite communications company’s April 26 registration statement filed with the Securities and Exchange Commission is materially incomplete and misleading. Without additional information, the filing claims that Loral Space stockholders cannot make an informed decision on how to vote their shares.
According to the complaint, Telesat Canada, an Ottawa-based company with offices worldwide, is “a global operator of telecommunications and direct broadcast satellites used to distribute video entertainment programming and broadband data and to provide access to Internet services and other value-added communications services.” Reportedly, Telesat is also rolling out a “global constellation of low earth orbit satellites.”
Last November, the companies announced merger plans. According to the press release reprinted in the complaint, “upon closing of the transaction, the stockholders in Loral, together with PSP Investments and certain current and former management shareholders of Telesat, will beneficially own all of the equity in New Telesat in approximately the same proportion as their current, indirect ownership in Telesat.”
The complaint set forth the shareholder’s concern that the proposed transaction may overcompensate Telesat and members of its board, at the expense of the Loral Space’s common stockholders. The shareholder then specified his legal contentions.
Allegedly, Loral Space’s registration statement omitted its financial projections, material information regarding the financial analyses performed by LionTree Advisors LLC, the conflicts and compensation to be received by Loral Space’s other financial advisor, Credit Suisse Securities (USA) LLC for its role in the proposed transaction, and the post-merger ownership structure.
The complaint asked the court to enjoin the defendants from consummating the proposed deal, unless and until the omissions and misleading statements are corrected. Too, the plaintiff requests his attorneys’ fees and litigation costs.
The shareholder is represented by Monteverde & Associates PC, a firm that also represents the stockholders contesting Jazz Pharmaceuticals PLC’s acquisition of GW Pharmaceuticals PLC, and those challenging the proposed merger between Inphi and semiconductor company Marvell Technology Group Ltd.
