SOURCE: Shareholders Foundation, Inc.

Shareholders Foundation, Inc.

February 23, 2010 13:21 ET

Shareholders Foundation Announces Investor Lawsuit Against Allegheny Energy, Inc. Insurance Corp. Board

SAN DIEGO, CA--(Marketwire - February 23, 2010) - The Shareholders Foundation, Inc. announces that a lawsuit has been filed in Baltimore State Court on behalf of current investors in Allegheny Energy, Inc., who purchased their AYE shares before February 11, 2010, over alleged breach of their fiduciary duties.

On February 11, 2010 Allegheny Energy, Inc. and FirstEnergy announced that both companies' boards of directors have unanimously approved a definitive agreement in which the companies would combine in a stock-for-stock transaction. Under the terms of the agreement, Allegheny Energy, Inc shareholders would receive 0.667 shares of FirstEnergy common stock (FE) in exchange for each share of Allegheny (AYE) they own. Based on the closing stock prices for both companies on February 10, 2010, Allegheny shareholders would receive a value of $27.65 per share. According to Allegheny Energy, Inc the price per share represents a premium of 31.6 percent to the closing stock price of Allegheny on February 10, 2010, and a 22.3 percent premium to the average stock price of Allegheny over the last 60 days ending February 10, 2010.

But Allegheny Energy, Inc. (AYE) shares were down from its 52 week high of $32.75 per share, $45.33 per share in August 2008, $54.75 per share in May '08, and almost $65 per share in 2007.

According to the complaint, the plaintiff alleges breach of fiduciary duty, that the transaction substantially undervalues Allegheny Energy shares, and that Allegheny Energy, Inc is selling itself too cheaply to First Energy, through an unfair process.

Those who currently are investors in shares of Allegheny Energy, Inc. and purchased their shares before Feb. 11, 2010, should contact the Shareholders Foundation, Inc. by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554.

The Shareholders Foundation, Inc. is an investor advocacy group which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The group offers help, support, and assistance for every shareholder, and investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

Contact Information

  • CONTACT:
    Shareholders Foundation, Inc.
    Trevor Allen
    +1 (858) 779-1554
    3111 Camino Del Rio North
    Suite 423
    San Diego, CA 92108