UPDATED 01:50 EDT / FEBRUARY 04 2016

NEWS

Proposed Dell/EMC merger slapped with another lawsuit

An optimistic New York law firm is hoping to make a name for itself by blocking the proposed $67 billion mega-merger between Dell Inc. and EMC Corp.

The GrantLawFirm, run by Lynda J. Grant, asserts that the Dell-EMC merger prospectus contains numerous “materially false and misleading statements and omissions of material fact”, in an amended class action on behalf of all public EMC shareholders “who are or will be damaged by a vote approving a proposed transaction.”

The class action complains that the Proxy Statement relating to the acquisition omits critical information relating to EMC’s projected finances for the year ahead, including its GAAP revenue, gross profit, operating and net income, unlevered free cash flows and various charges the company will have to pay.

In addition, the complaint asserts that Morgan Stanley’s prospectus opinion failed to disclose “an adjusted July Case”, on which most of its analysis was based. It also said a similar analysis by Evercore Group LLC fails to disclose EMC’s calculation of fully diluted shares, and “the equity value at the unaffected price for both EMC and VMware”.

CMS Wire reports that this is the third lawsuit relating to the Dell – EMC deal filed this year, adding to a consolidated lawsuit made up of 11 separate suits that were filed last year. For its part, EMC has admitted in SEC filings that it’s uncertain if it will win these lawsuits, but the company remains confident the merger will not be derailed. Indeed, Dell CEO Michael Dell wrote in an open letter to VCE customers last month that he still expects the deal to close “sometime later this year”.

GrantLawFirm says it’s hoping to find a lead plaintiff to act on behalf of other affected shareholders.


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