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J&W Investigates Proposed Sale of DuPont Fabros Technology

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There seem to be a few unanswered questions surrounding the merger of DuPont Fabros with Digital Realty. That is according to Johnson & Weaver LLP.

As the REIT Wire reported on Friday, Digital Realty and DuPont Fabros have entered into a definitive agreement under which DuPont Fabros will merge with Digital Realty in an all-stock transaction. The consummation of the transaction is subject to customary closing conditions, including approval by the shareholders of Digital Realty and DuPont Fabros.

But Shareholder rights law firm Johnson & Weaver LLP revealed that it has launched an investigation into whether the board members of DuPont Fabros Technology Inc. breached their fiduciary duties in connection with the proposed sale of the company.

Under terms of the deal, Digital Realty will exchange 0.545 of its shares for each Dupont Fabros share outstanding. Based on Thursday’s closing prices, that values Dupont Fabros shares at $63.63 each. However, shareholders will be subject to the future price fluctuation of Digital Realty’s stock price.

The investigation, according to Johnson & Weaver LLP, concerns whether the DuPont Fabros board failed to satisfy their duties to the company shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for DuPont Fabros shares of common stock.

The REIT Wire will continue to track this investigation and further details of the merger as they happen.