Ademi LLP is investigating Discover (NYSE: DFS) for possible breaches of fiduciary duty and other violations of law in its transaction with Capital One.
In the transaction, Discover shareholders will receive only 1.0192 Capital One shares for each Discover share. At close, Capital One shareholders will own approximately 60% and Discover shareholders will own approximately 40% of the combined company. The transaction agreement unreasonably limits competing transactions for Discover by imposing a significant penalty if Discover accepts a competing bid. Discover insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Discover’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.