NEW YORK, Nov. 25, 2020 /PRNewswire/ -- WeissLaw LLP is investigating possible breaches of fiduciary duty and other violations of law by the board of directors of BMC Stock Holdings, Inc. ("BMCH" or the "Company") (NYSE: BMCH) in connection with the proposed acquisition of the Company by Builders FirstSource, Inc. ("BLDR") (NASDAQ: BLDR). Under the terms of the merger agreement, BMCH stockholders will receive 1.3125 BLDR shares for each share of BMCH common stock they own, representing implied per-share merger consideration of $48.68 based upon BLDR's November 24, 2020 closing price of $37.09. At closing, BMCH's current stockholders will only own a 43% stake in the combined company.
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WeissLaw is investigating whether BMCH's management and the board may have artificially revised BMCH's financial projections downward in order to make the proposed transaction appear more favorable to BMCH stockholders than it truly is. Despite having a pre-existing set of long-term projections developed by management and relied upon by the board during the sales process, BMCH created a new, significantly revised set of financial projections in apparent response to BLDR's June 2020 revised all-stock acquisition proposal ("July Projections"). This occurred little more than a month before the BMCH board agreed to the proposed merger, and seems wholly inconsistent with the Company's recent unprecedented financial performance. To make matters worse, the earlier set of projections, the assumptions underlying those projections, and the basis for the significant revision of the July Projections is either wholly omitted or inadequately disclosed to BMCH shareholders. Without disclosure of the Company's earlier long-term projections or qualitative discussion describing how the long-term projections were changed in July, BMCH stockholders have no way to assess whether the revision was proper in light of the Company's record-setting second quarter financial results.
Given these facts, WeissLaw is concerned whether the board acted in the best interest of BMCH's public stockholders in agreeing to the proposed transaction and whether the exchange ratio is fair to the Company's public stockholders, and whether all information concerning the process leading to the proposed transaction and valuation of the Company on a standalone basis has been fully and fairly disclosed.
WeissLaw LLP has litigated hundreds of stockholder class and derivative actions for violations of corporate and fiduciary duties. We have recovered over a billion dollars for defrauded clients and obtained important corporate governance relief in many of these cases. If you have information or would like legal advice concerning possible corporate wrongdoing (including insider trading, waste of corporate assets, accounting fraud, or materially misleading information), consumer fraud (including false advertising, defective products, or other deceptive business practices), or anti-trust violations, please email us at email@example.com
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SOURCE WeissLaw LLP