Nortek Inc., a building-products maker, was sued by shareholders who say the
company would be undervalued in a $418.6 million buyout.
Providence-based Nortek said Monday that New York private equity firm Kelso & Co. made an informal offer to buy the company for $40 per share, a 7 percent premium at the time. The stock soon rose above $41.
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In one of two lawsuits filed Tuesday in Delaware Chancery
Court, Nortek stock owner Joseph Ingrassia says company directors
and executives have an obligation to get the best share price. His
suit says they have conflicts of interest because management would
retain part-ownership of the company.
“As participants in the proposed transaction, they are
motivated to allow Kelso to pay the lowest possible price to
Nortek’s public shareholders,” Ingrassia says in the suit.
He asks a judge to stop the transaction, award damages and
legal fees and grant the suit class-action status on behalf of all
outside shareholders.
Shares of Nortek, which reported $1.85 billion in fiscal 2001
sales, fell 37 cents to $41.26.
“We don’t believe the suit has any merit,” said Edward
Cooney, Nortek treasurer. The company said Monday it formed a
committee to consider a formal buyout offer if one is received.
The company and its subsidiaries sell residential building
products, heating and air conditioning equipment, and windows,
doors and siding in the U.S., Canada and Europe.
Bloomberg News
