BOSTON, April 1, 2014 /PRNewswire/ -- Block & Leviton LLP (www.blockesq.com), a Boston-based law firm representing investors nationwide, is investigating possible breaches of fiduciary duty by the Board of Directors of SWS Group, Inc. ("SWS" or the "Company") (NYSE: SWS) concerning the proposed acquisition of the Company by Hilltop Holdings ("Hilltop") (NYSE: HTH). The investigation also concerns whether Hilltop aided and abetted SWS' Directors' breaches. Investors in SWS will receive $1.94 in cash and 0.2496 shares of Hilltop common stock, valued at $7.88 per share based on the March 31, 2014, closing price of Hilltop. This represents a premium of barely 5% based on the Company's prior-day closing price. The offer is less than an earlier bid made just a few weeks ago by Esposito Global ("Esposito"), a financial services firm run by a former SWS employee with intimate knowledge of the Company. The Esposito offer represented an all-cash bid of $8.00 per share of SWS.
Hilltop has for years had an inside presence at the Company. In 2011, Hilltop invested $50 million in SWS in the form of a senior unsecured loan. Gerald Ford, Chairman of Hilltop, joined the Board of Directors of SWS and Hilltop's President and CEO, Jeremy Ford, became a non-voting observer to the SWS Board. In conjunction with Hilltop's investment in SWS, Hilltop was issued a warrant to purchase 8,695,652 common shares of SWS at an exercise price of $5.75 per share. Hilltop currently beneficially owns 24% of SWS common stock, inclusive of the warrant.
Block & Leviton's investigation seeks to determine, among other things, whether SWS' Directors breached their fiduciary duties by failing to maximize shareholder value in the proposed acquisition by Hilltop, the fairness by which the SWS Directors considered and approved the transaction, and specifically whether Hilltop dominated the process through its significant holdings in the Company.
If you are a SWS shareholder and have questions about your legal rights, or if you have information relevant to this investigation, please contact attorney Steven Harte, at (617) 398-5600 or email him at Steven@blockesq.com.
Block & Leviton's lawyers have collectively been prosecuting securities cases on behalf of investors for over 70 years. This notice may constitute attorney advertising.
BLOCK & LEVITON LLP
Steven Harte, Esq.
SOURCE Block & Leviton LLP