IHS Markit manages to avoid shareholder lawsuit over S&P deal
Less than a week after a lawsuit was filed against IHS Markit over its planned merger with S&P Global, the complaint was suddenly dropped. This is indicated by a notice of dismissal filed by the plaintiffs with the New York Southern District Court on March 3, 2021.
James Parshall, a stockholder of IHS Markit and a plaintiff in this case submitted the following the notice:
“Pursuant to F.R.C.P. 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, plaintiff James Parshall (“Plaintiff”) voluntarily dismisses the claims in the captioned action (the “Action”). Because this notice of dismissal is being filed with the Court before service by defendants of either an answer or a motion for summary judgment, Plaintiff’s dismissal of the Action is effective upon the filing of this notice”.
Let’s recall that the lawsuit targeted IHS Markit Ltd and the members of its Board of Directors. They were accused of violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(a), 78t(a), and U.S. Securities and Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9. These alleged violations arise out of IHS Markit’s attempt to merge with S&P Global Inc., through its wholly owned subsidiary Sapphire Subsidiary, Ltd.
On November 30, 2020, IHS Markit announced that it had entered into an Agreement and Plan of Merger pursuant to which, each IHS Markit stockholder will receive 0.2838 shares of S&P Global common stock for each share of IHS Markit common stock they own.
On January 22, 2021, IHS Markit filed a Schedule 14A Definitive Proxy Statement with the SEC. According to the plaintiffs, the Proxy is materially deficient and misleading because, inter alia, it fails to disclose material information regarding: (i) IHS Markit’s and S&P Global’s financial projections; (ii) the financial analyses performed by Morgan Stanley & Co. LLC; and (iii) Morgan Stanley’s potential conflicts of interest.
The plaintiff sought that the Court preliminarily and permanently enjoin the defendants and all persons acting in concert with them from proceeding with, consummating, or closing the proposed Transaction and any vote on the proposed Transaction.
Also, in the event defendants consummate the proposed transaction, the plaintiff asked that the Court orders rescinding it and setting it aside or awarding rescissory damages to the plaintiff.
The case was terminated on March 3, 2021.