Normally, a buying offer is significantly above trading price, and
from a 3rd party. This decision came from management, which has a
fiduciary duty to (all?) shareholders. From my perspective, a
significantly higher price should have been offered.
Is this buyout via reverse split at trade price not a breach of
fiduciary duty? If not, how so?
If the shareholders that control a majority of the votes want to do this type of maneuver, why would that be a breech of the the boards fiduciary duty?
I am assuming there is nothing in the current corporate governance documents that would block this type of transaction.
When the move to go private is done by a merger or an acqu9isition the board has to determine what is the fair value, and does this transaction achieve that level of value. In a reverse split transaction to go private they are being given exactly what the shares are trading for.
While there are costs with the reverse stock split when the small shareholders are given cash; there are also costs involved when a merger or acquisition is used to go private. Those small shareholders will end up with cash. The merging companies have to determine if the price being paid is fair.
