The Ademi Firm is investigating Civitas (NYSE: CIVI) for possible breaches of fiduciary duty and other violations of law in its transaction with SM Energy.
In the transaction, each Civitas share will be exchanged for 1.45 shares of SM Energy common stock. Following completion, SM Energy stockholders will own approximately 48% of the combined company while Civitas stockholders will own approximately 52% on a fully diluted basis.
Civitas insiders will receive substantial benefits as part of change of control arrangements.
The transaction agreement unreasonably limits competing transactions for Civitas by imposing a significant penalty if Civitas accepts a competing bid. We are investigating the conduct of the Civitas board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.
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