The complaint alleges violations of state law by the Board of Directors of ProLogis relating to the proposed acquisition of the company by AMB Property Corporation (" AMB"). The complaint alleges that ProLogis's Board of Directors breached their fiduciary duties by failing to maximize shareholder value, among other things.
On January 31, 2011, the complaint states, ProLogis and AMB announced that they entered into an agreement to combine through a merger of equals. Under the terms of the agreement, each ProLogis common share will be converted into 0.4464 of a newly issued AMB common share, and the combined company will be an umbrella partnership real estate investment trust. The complaint alleges that the merger significantly undervalues ProLogis. Based on AMB's prior closing price, the deal has an implied value of $14.70 per share. However, ProLogis shares traded as high as $16.52 per share as recently as January 27, 2011.
Moreover, the complaint states that according to Thomson/First Call as reported on Yahoo! Finance, at least one analyst set a price target for ProLogis stock of $16.50 per share. The complaint also alleges that the merger is the result of an unfair sales process designed to ensure that only AMB has an opportunity to acquire the company due to the "no shop" provision, a matching rights provision, standstill agreements, and a $315 million termination fee. Further, the complaint alleges that the Board of ProLogis agreed to be acquired by AMB in order to secure material benefits for themselves including the accelerated vesting and monetization of illiquid equity holdings.
