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WILMINGTON, Del., Aug. 29, 2016 -- Andrews & Springer LLC, a boutique securities class action law firm focused on representing shareholders nationwide, is investigating potential breach of fiduciary duty claims against the Board of Directors of Rackspace Hosting, Inc. (“Rackspace” or the “Company”) relating to the sale of the Company to affiliates of private equity firm Apollo Global Management LLC (“Apollo”). On August 26, 2016, the two parties announced the signing of a definitive merger agreement pursuant to which Apollo will acquire Rackspace in a merger in a deal worth $4.3 billion. As a result of the merger, Rackspace shareholders are only anticipated to receive $32.00 per share in cash in exchange for each share of Rackspace.
Andrews & Springer’s investigation so far has revealed that the consideration Rackspace are expected to receive is inadequate. While the Company claims that shareholders will receive a premium for their shares, the merger price is only 6% above Rackspace’s August 25, 2016 closing price of $30.19 per share. In addition, the consideration is less than the $38.00 per share price target given by Cowen Company in August 2016, several weeks before the merger was announced. The $32.00 per share consideration is also 2.62% below Rackspace’s 52-week high of $32.84. Our investigation has also revealed that the process leading up to the announcement of the merger appears to have significant conflicts of interest thus making the process and consideration unfair.
If you own shares of Rackspace and want to receive additional information and protect your investments free of charge, please visit us at http://www.andrewsspringer.com/cases-investigations/rackspace-class-action-investigation or contact Craig J. Springer, Esq. at [email protected], or call toll free at 1-800-423-6013. You may also follow us on LinkedIn – www.linkedin.com/company/andrews-&-springer-llc, Twitter – www.twitter.com/AndrewsSpringer or Facebook - www.facebook.com/AndrewsSpringer for future updates.
Andrews & Springer is a boutique securities class action law firm representing shareholders nationwide who are victims of securities fraud, breaches of fiduciary duty or corporate misconduct. Having formerly defended some of the largest financial institutions in the world, our founding members use their valuable knowledge, experience, and superior skill for the sole purpose of achieving positive results for investors. These traits are the hallmarks of our innovative approach to each case our Firm decides to prosecute. For more information please visit our website at www.andrewsspringer.com. This notice may constitute Attorney Advertising.
Contact: Craig J. Springer, Esq. [email protected] Toll Free: 1-800-423-6013
