February 11, 2011
Shareholder Suit in Pride/ENSCO Merger
Posted by Christine Hurt

A couple of days ago I mentioned in passing that two very large deepwater drilling companies were merging:  Houston-based Pride International and ENSCO.  Now, a shareholder suit has been filed against Pride alleging breach of fiduciary duties.  Specifically, the price ($41.60 a share, representing a premium of 21%) is too low and the process (no-shop clause, $260 million termination fee) is unfair because it ties the board's hands.  Remember, the total price tag for Pride is $7.3 billion.  So, we'll see!  (The complaint is available at plaintiff's counsel's website.)  For those of you keeping score at home, Pride did file a copy of a Shareholder's Rights Plan with the SEC on September 28, 2001, which was amended in April 2008.  I have not found a filing terminating or amending the plan since then, but it's Friday and I'm sloppy.  (ADDED:  With the merger announcement filing, Pride referenced the rights plan and amended it to not apply to ENSCO, so there you go.)

I feel very odd blogging about this because my first Houston law firm, Baker Botts, represents Pride.  In fact, Pride was one of the first client matters I worked on in 1994.  What's even more interesting, in that "wow, Houston sure is a small town" sort of way, is that the plaintiff's counsel, Ahmad, Zavitzanos & Anaipakos, was started by an attorney who left B&B in 1993.  And, there are many other ties between the firms.  Most Fridays, I'm pretty glad not to be at the law firm.  Today, I'm sort of missing out!

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