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Endurance International: Some stakeholders not happy with the $3 billion deal

Endurance International is being sold in a $3 billion dollar deal to the Clearlake Capital Group; the company’s public stock price is being used as a gauge for the sale price.

In essence, NASDAQ-listed EIGI is being valued with a 64% premium above its closing price on Friday ($5.81 per share) but apparently some stakeholders might not be in agreement; the company is worth more, quite possibly.

There’s now an investigation launched by a law firm, Ademi LLP.

According to a memo sent out today, the law firm is investigating Endurance International “for possible breaches of fiduciary duty and other violations of the law in its transaction with Clearlake.”

Says the memo:

Ademi LLP alleges Endurance International’s financial outlook is improving and yet shareholders will receive only $9.50 per share for each share of Endurance International common stock owned. The merger agreement unreasonably limits competing bids for Endurance International by prohibiting solicitation of further bids, and imposing a termination penalty if Endurance International accepts a superior bid.

Endurance International insiders will receive millions of dollars as part of change of control arrangements. We are investigating the conduct of Endurance International’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Endurance International.

The law firm’s investigation is not an indicator of wrong-doing by Endurance International. The firm is seeking feedback from holders of common stock.

Endurance International maintains a domain portfolio of extremely valuable domain names, under its BuyDomains company. Other assets include BlueHost and HostGator – major hosting companies – along with domain registrars Big Rock and Domain.com.

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