DALLAS, June 5, 2012 /PRNewswire/ -- Branham Law, LLP is investigating potential securities law violations, breaches of fiduciary duty and other possible legal violations by members of the board of directors of CREDO Petroleum Corporation (NASDAQ: CRED). The investigation was sparked by the Board of Directors efforts to sell the company to Forestar Group Inc. (NYSE: FOR).
CREDO announced a merger agreement on June 4, 2012, in which the end result is the acquisition of CREDO by Forestar. The terms of the deal include the acquisition of all outstanding CREDO shares for a purchase price of $14.50 in cash. CREDO wants to close the transaction in the second half of 2012.
Branham Law, LLP's is concerned that shareholders may not be realizing maximum value for shareholders. This is particularly true given the company's recent financial successes. CREDO's 2012 results have been very positive, reporting on April 26, 2012 that the company had revenues of $5.8 million, a 79.1% increase over the $3.2 million in revenue reported during the same quarter of the previous year. Moreover, CREDO reported an exceptional increase in net income from $169,000 in first quarter of fiscal year 2011 to $962,000 for the first quarter of 2012. This is an increase of 469.2%. Statements from Michael C. Davis, CREDO's Interim Chief Executive Officer, appear to indicate that the company expects continue strong growth during the company's planned transition from natural gas to oil.
These results appear to support at least a greater share price or the continued independence of the company to permit shareholders to participate in the expected growth.
If you hold CREDO shares and held them during the above period and have information about or questions concerning these issues or your rights as a shareholder, you may contact Trey Branham at 855-722-5910 or [email protected].
SOURCE Branham Law, LLP