1. Kahn Swick & Foti is investigating DNOW's acquisition of MRC Global. 2. MRC shareholders receive 0.9489 DNOW shares per MRC share owned. 3. Investigation seeks to determine adequacy of transaction valuation. 4. Concerns arise over potential undervaluation of MRC in the sale.
The ongoing investigation raises concerns about potential shareholder dissatisfaction, mirroring past acquisition issues that negatively affected acquired companies' stock prices. Companies often face pressure on their shares when legal investigations arise post-announcement, leading to investor caution.
The investigation into the fairness of the merger has direct implications on the perceived value of DNOW following the acquisition. Investors are likely concerned about potential valuation discrepancies, which may lead to price adjustments.
The immediate market reaction to acquisition announcements and legal scrutiny typically influences stock performance shortly after the news. Similar past situations have shown that stock volatility occurs as markets react to potential undervaluation claims quickly, typically resolving over a few weeks to months.