Whoa ... look what just crossed ....
AboveNet Holder Sues Over Proposed Acquisition by Metromedia
Wilmington, Delaware, June 30 (Bloomberg) -- AboveNet Communications Inc., which markets Internet
connections, was sued by a stockholder who says the company's shares are undervalued in a proposed
$1.55 billion takeover by Metromedia Fiber Network Inc.
San Jose, California-based AboveNet, which reported 1998 sales of $3.44 million, said June 23 it would
be acquired by White Plains, New York-based Metromedia Fiber, with 1998 sales of $36.4 million --
exchanging 1.175 Metromedia shares for each AboveNet share, or about $42.22 today, a 4 1/2 percent
premium.
In a suit filed in Delaware Chancery Court in Wilmington, AboveNet shareholder Sinai Kaufman
contends the shares are worth more, and that AboveNet failed to shop around to obtain the highest price
for its stock.
''Despite the obvious long-term value (of the combined company), the substantial synergies which
Metromedia will enjoy by virtue of the AboveNet transaction are not adequately reflected in the
exchange ratio,'' Kaufman says in the suit. Kaufman asks a judge to give the suit class-action status on
behalf of all shareholders, to stop the transaction, and to award damages and legal fees.
Metromedia Fiber is controlled by John Kluge and Stuart Subotnick, who own privately held East
Rutherford, New Jersey based Metromedia Co. -- owner of the Bennigan's, Bonanza, Ponderosa, and
Steak & Ale restaurant chains, according to Hoover's Company Profiles. The company recently has been
involved in radio, paging, and mobile phone development in emerging markets.
Officials of AboveNet and Metromedia would not immediately comment on the lawsuit. Shares of
AboveNet rose 5 3/16 to 40 3/8. The shares rose to a 52-week high of 75 1/2 on April 12. Metromedia
Fiber's Class A shares rose 3 15/16 to 35 15/16.
Jun/30/1999 18:37 |
