PITTSBURGH - Alcoa faces a lawsuit alleging it sent a misleading proxy statement to investors concerning a proposed acquisition.
A lawsuit was filed June 25 in the Court of Common Pleas of Allegheny County by Keith Palmer against Alcoa Corporation and Alumina Limited, along with several individual defendants.
The case revolves around Alcoa's proposed acquisition of Alumina Limited, which Palmer claims is detrimental to current Alcoa investors. The complaint alleges that Alcoa is overpaying for Alumina by nearly $1.5 billion and that the transaction will significantly dilute the ownership and voting rights of existing shareholders.
Additionally, it accuses the defendants of failing to disclose conflicts of interest and providing misleading information in a proxy statement sent to shareholders.
Palmer asserts that the acquisition benefits Alcoa's executives and board members financially while harming shareholders. He also criticizes J.P. Morgan, Alcoa's financial advisor, for allegedly having a vested interest in seeing the deal go through due to contingent fees and existing business relationships with both companies involved.
The lawsuit seeks to enjoin the closing of the acquisition until all material information is fully disclosed to shareholders. It also demands compensatory damages and other reliefs for alleged negligent misrepresentation and concealment by the defendants.
Kaitlyn Burns of Feinstein Doyle, Payne & Kravec represents the plaintiff.