Verizon sued over Vodafone buyout

It seems every time a US company sneezes they are always dragged to court by an indignant shareholder whose nose has been put out of joint.

Verizon Communications has been sued by a shareholder seeking to void its $130 billion buyout of Vodafone Group stake in the companies’ wireless joint venture.

Natalie Gordon is suing, thinking that Verizon paid too much for the British outfit’s US assets.

In a lawsuit filed in a New York state court on Thursday, just three days after the transaction was announced, Gordon said Verizon shareholders were being “shortchanged” by the purchase of Vodafone’s 45 percent stake in Verizon Wireless.

Verizon wrote a cheque for $59 billion in cash, $60 billion in stock and other sums.

Gordon told Reuters Verizon overpaid for the shares and claimed that Wall Street analysts agreed with her. She pointed out that Moody’s Investors Service downgraded Verizon’s credit.

She added that the share price had dropped by more than ten percent since the deal was announced.

Gordon has sued Verizon chief executive Lowell McAdam and 12 directors as defendants, accusing them of breaching their fiduciary duties.

She wants Verizon to rescind the purchase or improve the terms, and force the individual defendants to pay damages.

Randal Milch, Verizon executive vice president and general counsel, said in a statement that the lawsuit is entirely without merit, and Verizon intends to defend itself vigorously.

Vodafone, which is not a defendant, shrugged and went somewhere hot for the summer.

Law firm Faruqi & Faruqi, which is representing Gordon, has been a shareholder plaintiff in several other lawsuits filed by her.