ALEXANDRIA — Two lawsuits have been filed by shareholders against Cleco Corp. relating to the company’s proposed sale.
Both suits argue the sale price undervalues the company and allege the proposed sale was engineered for company directors and executives who would profit from change in control benefits.
The lawsuits on behalf of Edward Braunstein and Helen Moore were filed in state court in Alexandria this week. The Braunstein suit names Cleco and its eight-member board of directors as defendants. The Moore suit also names the potential buyers as defendants.
Pineville-based Cleco, which serves parts of Acadiana and the north shore, announced on Oct. 20 that it had reached a sale agreement with an investment group led by Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corp., together with John Hancock Financial. The parties agreed to a valuation of $4.7 billion — $3.4 billion in cash and $1.3 billion in assumed debt.
The sale must still be approved by Cleco shareholders, the state Public Service Commission and the Federal Energy Regulatory Commission. If approved, the deal is expected to be completed in the second half of 2015.
If the agreement is approved, Cleco shareholders will receive $55.37 per share. The lawsuits allege that price is too low and charge Cleco’s board with breach of fiduciary duty.
“These kinds of lawsuits are unfortunately commonplace after almost any merger or acquisition is announced,” a statement from Cleco read. “In Cleco’s case, we are confident this transaction is in the best interest of the company and all of our stakeholders, with benefits to our shareholders, our employees, retirees, customers, communities and the economic vitality of the region. We believe the suits are baseless and will defend against it.”