SOURCE: Levi & Korsinsky

August 13, 2009 18:12 ET

Levi & Korsinsky LLP Announces Class Action Lawsuit Against Virgin Mobile USA, Inc. - VM

NEW YORK, NY--(Marketwire - August 13, 2009) - Levi & Korsinsky announces that a class action lawsuit has been filed in New Jersey state court challenging the proposed acquisition of Virgin Mobile USA, Inc. ("Virgin Mobile" or the "Company") (NYSE: VM). The Complaint arises out of the announcement by Virgin Mobile stating that it had entered into a definitive merger agreement with Sprint Nextel Corp. ("Sprint") (NYSE: S). Under the proposed agreement, each Virgin Mobile shareholder will receive Sprint shares having a 10-day average closing price equivalent to $5.50 per Virgin Mobile share for a total equity value of approximately $483 million.

The complaint alleges that the price is unfair and the Company did not take adequate steps to maximize shareholder value. In particular, Sprint already owns approximately 13.1% of Virgin Mobile, which uses Sprint's cellular network to offer its services, and Sprint has entered into voting agreements that, together with the Virgin Mobile shares it owns, comprise approximately 40% of the outstanding voting power of Virgin Mobile. In addition, the Company agreed to refrain from soliciting competing offers that may be superior than the Sprint offer and also agreed to pay Sprint a termination fee of $14.2 million in the event the agreement is terminated under certain circumstances that will all but ensure that no superior offer will ever be forthcoming.

The companies expect to consummate the transaction in the fourth quarter of 2009 or in early 2010, subject to customary closing conditions, including all necessary regulatory and stockholder approvals.

If you own common stock in Virgin Mobile and wish to obtain additional information, please contact us at the number listed below or visit http://www.zlk.com/vm1.html.

Levi & Korsinsky has expertise in prosecuting investor securities litigation and extensive experience in actions involving financial fraud and represents investors throughout the nation, concentrating its practice in securities and shareholder litigation.

Contact Information

  • CONTACT:
    Levi & Korsinsky, LLP
    Joseph Levi, Esq.
    Eduard Korsinsky, Esq.
    30 Broad Street - 15th Floor
    New York, NY 10004
    Tel: (212) 363-7500
    Fax: (212) 363-7171
    www.zlk.com