News that Avis Budget Group plans to buy car sharing network Zipcar for $500 million opened some eyes this morning. But this could have trouble going through, with a law firm announcing it is investigating whether Zipcar didn’t get the best deal possible.
Former SEC attorney Willie Briscoe and the securities litigation firm Powers Taylor will investigate whether Zipcar’s shareholders won’t get enough cash in the transaction.
Avis said it will pay $12.25 per share for Zipcar, a premium of about 50 percent over Zipcar’s share price on Dec. 31. But the investigating party says the Zipcar board may not have obtained the highest price it could have.
“Due to the proposed sale price, the size of the deal and other factors, we believe this transaction may undervalue Zipcar’s stock,” Briscoe said in a statement. “Our proposed lawsuit will seek to obtain the highest share price for all shareholders.”
Briscoe and Powers Taylor pointed out that one Yahoo Finance analyst estimated Zipcar’s shares to be worth up to $13 apiece. It’s also notable that Zipcar’s 52-week high on the stock market was $16.25 per share.
Avis said it expected the Zipcar deal to close in the second quarter of 2013, so we will see what happens.