It appears that not only ticket and entertainment industry insiders are among the ones questioning the planned merger of Live Nation and Ticketmaster.
A group of Ticketmaster Entertainment shareholders have filed a class action lawsuit against the company claiming that the deal allegedly undervalued Ticketmaster. The planned merger calls for Live Nation to issue 1.384 shares of its stock for every share of Ticketmaster stock under what is valued as a $2.5 billion deal.
According to the Los Angeles Business Journal, the lawsuit was filed late last week in Los Angeles Superior Court and calls on a judge to stop the planned merger, which is in the midst of federal regulatory review.
Among the reported claims the lawsuit makes includes a belief that Ticketmaster executives purposely exploited the company’s low stock price in making the deal, and that some company executives allegedly made side deals for their own benefit outside of the merger agreement. These alleged separate benefits may have come at the detriment of shareholders, according to the Los Angeles Business Journal.
Ticketmaster did not return a message seeking comment. News of the lawsuit comes just a few days after Live Nation’s largest shareholder announced he may oppose the deal if Ticketmaster Chairman Barry Diller does not take a lesser role in the newly merged company, to be called Live Nation Entertainment.
Since Ticketmaster stock began trading publicly last summer under the symbol TKTM, shareholders have watched the stock price plummet from a high of $27 per share to $4.52 as of about 11:45 am today, February 17. Live Nation stock, which trades under the symbol LYV, has also dropped significantly in value in the past year and was trading at $3.49 this morning. See tickers below.
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