SAN ANTONIO, Feb. 24, 2017 /PRNewswire/ -- If you held shares of Rackspace Hosting, Inc. between August 26, 2016 and November 3, 2016, this Notice contains important information regarding the dismissal of a putative class action concerning the acquisition of Rackspace Hosting, Inc., and an agreement to pay attorneys' fees and expenses to counsel for Plaintiff in that action.
The purpose of this notice is to inform former stockholders of Rackspace Hosting, Inc. ("Rackspace") about developments with respect to the litigation in the Delaware Court of Chancery styled Luger v. Rackspace Hosting, Inc., et al., C.A. No. 12819-CB (the "Action").
On August 26, 2016, Rackspace announced the proposed acquisition of Rackspace by affiliates of certain funds managed by affiliates of Apollo Global Management, LLC ("AGM"), including Inception Parent, Inc. and Inception Merger Sub, Inc. (collectively with AGM, "Apollo"), for $32.00 per share in cash, pursuant to a definitive agreement and plan of merger filed with the United States Securities and Exchange Commission ("SEC") on August 30, 2016 (the "Transaction").
On September 30, 2016, Rackspace filed a Definitive Proxy Statement (the "Proxy Statement") with the SEC in connection with the Transaction.
On October 11, 2016, a purported Rackspace stockholder ("Plaintiff") commenced the Action by filing a Verified Class Action Complaint (the "Complaint") in the Delaware Court of Chancery, alleging that Rackspace's Board of Directors (the "Board") breached its fiduciary duties by disseminating a materially false and misleading Proxy Statement, and that Rackspace and Apollo aided and abetted the Board's breaches of fiduciary duties.
On October 17, 2016, Plaintiff sent a letter (the "Letter") to defendants in the Action demanding the disclosure of additional information Plaintiff considered material to the decision whether to approve the Transaction.
On October 24, 2016, Rackspace filed a supplement to the Proxy Statement on Form DEFR14A with the SEC that Plaintiff believes addressed and mooted the claims raised in the Letter and the Complaint regarding the sufficiency of the disclosures in the Proxy Statement.
On November 2, 2016, Rackspace stockholders voted to approve the Transaction, which closed on November 3, 2016.
On November 30, 2016, the Delaware Court of Chancery entered a Stipulation and Order dismissing the Action with prejudice as to Plaintiff, and without prejudice as to any other putative class member, and retaining jurisdiction solely for the purpose to determine Plaintiff's counsel's anticipated application for an award of attorneys' fees and reimbursement of expenses based upon the alleged benefits provided by certain supplemental disclosures set forth in the supplement to the Proxy Statement (the "Fee and Expense Application").
After negotiations, Rackspace has agreed to make a fee and expense payment to Plaintiff's counsel in the Action in the amount of $190,000 to resolve the Fee and Expense Application. The Delaware Court of Chancery has not been asked to review, and will pass no judgment on, this payment of fees and expenses or its reasonableness.
If you have any questions regarding the Action, please contact the attorneys below:
RIGRODSKY & LONG, P.A.
Brian D. Long
2 Righter Parkway, Suite 120
Wilmington, DE 19803
Attorneys for Plaintiff
PAUL, WEISS, RIFKIND,
WHARTON & GARRISON LLP
Lewis R. Clayton
1285 Avenue of the Americas
New York, NY 10019-6064
Attorneys for Defendant Rackspace Hosting, Inc.
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SOURCE Rackspace Hosting, Inc.