SAN DIEGO and ARLINGTON, Va., April 29, 2015 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of MCG Capital Corporation (NASDAQ: MCGC) by PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT). On April 29, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which PennantPark will acquire MCG Capital. Under the terms of the agreement, MCG Capital shareholders will receive the equivalent of $4.75 in a combination of PFLT shares and cash for each share of MCG Capital common stock.
View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/mcg-capital-corp
Is the Proposed Acquisition Best for MCG Capital and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at MCG Capital is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $4.75 merger consideration represents a premium of only 18.2% based on MCG Capital's closing price on March 30, 2015. This premium is significantly below the average one-month premium of nearly 44.5% for comparable transactions within the past five years. In the last three years, MCG Capital has traded as high as $5.55 on August 1, 2013. Most recently, MCG Capital traded above the offer price on January 22, 2014, trading as high as $4.76.
On March 2, 2015, MCG Capital reported strong earnings for its fourth quarter 2014. Notably, net income for the fourth quarter of 2014 was $2.07 million, up 61.5% from the third quarter of 2014.
In light of these facts, Robbins Arroyo LLP is examining MCG Capital's board of directors' decision to sell the company now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.
MCG Capital shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. MCG Capital shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The law firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
Attorney Advertising. Past results do not guarantee a similar outcome.
SOURCE Robbins Arroyo LLP