A Continental Airlines Inc. shareholder has filed a class-action lawsuit against the airline, its 10-member board and UAL Corp. — parent of United Airlines — challenging the proposed merger of the two carriers.
United is the largest carrier at Denver International Airport. The merger was agreed to late Sunday by the two airlines’ boards and announced Monday.
The lawsuit, filed by Kenneth Page in a Texas state court, claims Houston-based Continental (NYSE: CAL) sold itself too cheaply to Chicago-based UAL (NASDAQ: UAUA) — exchanging 1.05 UAL shares for each share of Continental, worth about $22.60 a share, or $3.14 billion — with “a whopping $175 million termination fee.”
The $22.60 per share was UAL’s closing price as of April 30.
Page’s suit charged that the price was more than $1.50 per share less than where Continental’s stock was trading two weeks before the merger was announced. Continental traded as high as $24.29 last month, boosting the airline’s 52-week high.
DETAILS of the airline merger.
REACTION to the deal.
VIDEO: The DBJ’s Mark Harden reports on the ailine merger on CBS4 News.
STATEMENT: The official merger announcement from United and Continental.
MERGER WEBSITE: The official United-Continental website on the merger.
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