Ademi LLP is investigating Earthstone (NYSE: ESTE) for possible breaches of fiduciary duty and other violations of law in its transaction with Permian Resources.
In the transaction, Earthstone stockholders are expected to receive only 1.446 shares of Permian Resources common stock for each share of Earthstone common stock in an all-stock transaction valued at approximately $4.5 billion, inclusive of Earthstone’s net debt. The transaction agreement unreasonably limits competing transactions for Earthstone by imposing a significant penalty if Earthstone accepts a competing bid. Earthstone insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Earthstone’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.