RailAmerica Inc. (RA:US), the short-line railroad being bought by Genesee & Wyoming Inc. (GWR:US) for $1.39 billion, was sued by a shareholder who contends investors will be shortchanged in the transaction.
Directors of RailAmerica, based in Jacksonville, Florida, have a duty to get the maximum price for the stock and should have sought more suitors, lawyers for KBC Asset Management NV contend in a lawsuit filed today in Delaware Chancery Court.
If the $27.50 per share takeover is completed, “it will result in RailAmerica’s investors losing their interest in the company through an inadequate sales process” and cause “irreparable harm” to shareholders, KBC alleged in the suit.
RailAmerica, which is controlled by Fortress Investment Group LLC (FIG:US) and Greenwich, Connecticut-based Genesee, said in a statement July 23 that the buyout will combine the two largest short-line and regional rail operators in North America, running through 37 U.S. states.
“The company has been improperly valued and shareholders will likely not receive adequate or fair value for their RailAmerica common stock,” said investor Semyon Pesochinsky in a companion lawsuit also filed today in the same court.
KBC is asking a judge to stop the proposed deal, and to award legal fees.
Donia Crime, a spokeswoman for RailAmerica, didn’t immediately return a phone call seeking comment on the lawsuit.
Shares of RailAmerica rose 6 cents to $27.44 in New York Stock Exchange composite trading at 4 p.m. Genesee rose 1.76 percent to $65.39 on the NYSE.
The case is KBC v. RailAmerica, CA7755, Delaware Chancery Court (Wilmington).
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