Lawsuits seeking to block Duke Energy's merger with Progress Energy have begun rolling into Wake County Superior Court.
Less than two weeks after the two North Carolina power companies said they would form the nation's biggest electric utility, at least five Progress shareholders have sued to stop the deal. More are expected to file lawsuits in coming weeks.
Their beef: Duke is not paying Progress shareholders enough for their stock. The lawsuits seek class-action status so they can represent all Progress shareholders.
The suits follow announcements, issued by law firms within days of the merger announcement, seeking shareholders who want to sue.
"We're trying to stop the merger from going forward so that the value of the stock held by Progress shareholders is maximized," said Gary Jackson, a Charlotte lawyer who filed several of the cases on behalf of lead law firms in New York and Pennsylvania. Lawyers at those firms declined to comment.
Jackson said the suits could force Duke to increase its offer to Progress shareholders. If the court allows the merger to go ahead, the suits would likely seek to collect money damages for the shareholders.
Virtually all mergers are followed by shareholder lawsuits, but it's unusual for such suits to derail a deal. Executives who structure mergers are themselves shareholders and typically line up support from their biggest institutional investors.
Duke and Progress have touted the merger as a boon to shareholders and customers alike, saying the bigger combined company will be better positioned to build nuclear plants, boost stock value and manage electricity costs. The deal is not expected to be completed until later this year at the earliest.
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