Ademi LLP is investigating Enerplus (TSX: ERF) (NYSE: ERF) for possible breaches of fiduciary duty and other violations of law in its transaction with Chord.
In the transaction, Enerplus shareholders will receive only 0.10125 shares of Chord common stock and $1.84 per share in cash, representing 90% stock and 10% cash consideration. Upon completion of the transaction, Chord shareholders will own approximately 67% of the combined company and Enerplus shareholders will own approximately 33% on a fully diluted basis. The transaction agreement unreasonably limits competing transactions for Enerplus by imposing a significant penalty if Enerplus accepts a competing bid. Enerplus insiders will receive substantial benefits as part of change of control arrangements.