Following the announcement of Naver’s intention to acquire secondhand marketplace Poshmark, two law firms have come forward to launch investigations into whether the duo acted in the best interest of its shareholders.
Earlier this week, South Korea’s Naver had said it had signed an agreement with the resale platform to acquire all of its shares for 17.90 dollars in cash, representing an enterprise value of approximately 1.2 billion dollars.
However, US law firms Weiss Law and Ademi LLP have been called in to investigate possible breaches of fiduciary duties and other violations of law by the board of directors of Poshmark.
In its case filing, Weiss Law said it will be looking into whether Poshmark’s board of directors acted in the best interests of company shareholders for the agreed transaction and whether the proposed 17.90 dollars per share adequately compensates them.
Additionally, the firm will also be enquiring into if all information regarding the sales process and valuation of the transaction will be fully and fairly disclosed.
Insufficient deal for shareholders
Ademi LLP will also be looking at similar concerns, with it alleging in its case file that as Poshmark’s financial outlook and prospects appear to be excellent, the agreed deal may not suffice.
The company went on to say: “The transaction agreement unreasonably limits competing bids for Poshmark by imposing a significant penalty if Poshmark accepts a superior bid. Poshmark insiders will receive substantial benefits as part of change of control arrangements.”
Ademi will be looking into the conduct of Poshmark’s board of directors, and whether they are fulfilling their fiduciary duties and obtaining a fair price for the platform.
At the time of the acquisition announcement, the duo said that the merger aims to aid in the creation of a global player in online fashion e-commerce, by combining Poshmark’s platform with Naver’s technological capabilities.
The social commerce marketplace will utilise Naver’s track record in Asia, with the Korean web portal also eyeing potential international growth, including in Poshmark’s North American base.