As many as five US-based law firms are investigating charges of whether IGATE Board of Directors failed to maximise gains of shareholders before inking the multi-billion dollar deal with French rival Capgemini. These law firms are reaching out to shareholders and investors of IGATE to join their investigation to ascertain if the company's Board violated their mandate, which if proved could lead to class action law suits against the firm.
Earlier this week, Capgemini agreed to acquire the New Jersey-based company for $4 billion in an all cash deal. The firms -- Weisslaw, Rosen law Firm, Ryan & Maniskas, Block & leviton and Faruqi & Faruqi -- are investigating for “possible breaches of fiduciary duty and other violations of law” as well as the fairness with which IGATE Board considered and approved the transaction.
When contacted, IGATE declined to comment on the matter. Fiduciary duty is generally termed as a legal obligation of one party to act in best interests of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property. Boston-based law firm Block & leviton said: "Under the terms of the proposal, Capgemini will acquire each IGATE share for $48 in cash, a paltry premium of approximately 4.7 per cent.“
Not surprisingly, because it was able to acquire IGATE at such a substantial discount to its true value, shares of Capgemini soared as high as $85.77 upon the announcement of the proposed transaction, representing double the premium received by IGATE shareholders.” Market reports have stated that Capgemini has already secured voting power of 54 per cent to push the deal through, the firm added.