Did Koch Industries breach fiduciary duty by buying Molex Inc. (NASDAQ:MOLX)
Molex Inc. (NASDAQ:MOLX) and Koch Industries concluded a takeover deal worth $7.2 billion, a hefty price for a paper-towel brand to enter the coveted fiber optic interconnection domain. The sale is analyzed to be a premium price as Molex shares saw a 31-percent jump in prices on its two publicly traded shares.
Deal has led to violation of Fiduciary duty investigation
However, the sale has attracted quick reaction and given room for an investigation for fiduciary duty dereliction. Komlossy Law, P.A, has announced that it will investigate the Board of Directors of Molex for violation of state laws as well as failing to shop for higher prices of sale.
Molex Inc. to remain a standalone firm under Koch Industries
Molex Inc. manufactures electronic connectors for gadget companies such as Apple Inc. Koch, a chemical and energy company owned by conservative brothers Charles and David Koch, who reportedly walked away talks for buying ‘Tribune Co. newspaper assets’ earlier last month as it was not a good acquisition, looks to gain entry into the new age electronic connectors market. Koch Industries also owns Brawny paper towels, Lycra and Dixie Cups. Forbes concludes, the Koch Industries with an approximate annual sales figure of $115 billion, is one of the largest privately held US Company, second only to Cargill the beef processing company.
Molex Inc. sale was approved by Class B shareholders, whose approval has been necessary for the sale of the company. A much highlighted part of sale is that, despite the sell-out the management will remain the same at Molex Inc. According to news analysts, Molex has no union affiliations and has structured a good management program that is pro-employees. Therefore, it needs to be seen if despite the ownership change and continuation of current Molex Inc. management the company, employees are short changed. Under current sale conditions, shareholders will earn $38.50 for each share of Molex Inc. they own.