Dallas attorney Joseph Kendall, a former federal judge, seems to have won the race to the courthouse to challenge Warren Buffett’s takeover of Burlington Northern as inadequately generous. Daniel Fisher of Forbes discusses the economics of entrepreneurial lawsuits arising from takeovers — settlements may reflect defendants’ wish not to undergo the heavy burdens of discovery, and if the acquirer should happen to raise its bid during the process, you can take credit for that as a basis for fees — and reports that “this isn’t the only takeover Kendall thinks investors should be unhappy about: On his firm’s Web site are listed announcements of litigation or potential litigation over Stanley Works’ $4.5 billion takeover of Black and Decker, JDA Software’s acquisition of i2 Technologies, Texas Pacific Group’s $4 billion purchase of IMS Health Inc., and the purchase of Diedrich Coffee by Peet’s Coffee & Tea. And that’s only this month.”
One Comment
As a shareholder in several dozen publicly traded corporations, I find myself more frequently feeling that the companies I own are overpaying.
As for the rest of it, I don’t see that Buffett owes any duty to the shareholders of Burlington Northern. If he can talk whatever supermajority is needed to sell out for a stick of used chewing gum, that’s their lookout.
Bob