Dell-led $7.7B Baldwin take-private draws fiduciary probes

Three shareholder-rights law firms are examining The Baldwin Group's $7.7 billion take-private, questioning whether the $32.50-a-share price agreed with a buyer group that includes Michael Dell's family office gives investors fair value. No lawsuit has been filed and none has made specific allegations of wrongdoing.

Baldwin agreed on Sept. 14 to be taken private by an entity formed by Sequence Holdings and DFO Management, the Dell family's investment office, in an all-cash deal valued at about $7.7 billion. The company says the $32.50 price is a premium of about 88% to its unaffected closing price on June 17, the day before reports emerged that it was considering a take-private.

For an RIA's clients holding Baldwin shares, the choice is $32.50 a share in cash at closing. Eligible employees who already hold equity can roll part of their holdings into the private company and keep a significant minority stake alongside the buyers. Shareholder investigations of this kind are common after public takeovers and few stop a deal from closing, but they often lead to additional disclosure in proxy materials sent to shareholders before the vote.

Los Angeles-based Schall, Brown & Schwartz is the latest to announce a probe, saying it is examining whether Baldwin's directors and management breached their fiduciary duties to shareholders, according to Insurance Business America. Kaskela Law and Bronstein, Gewirtz & Grossman have announced similar investigations, and both focus on whether $32.50 a share gives investors fair value.

The transaction still needs regulatory and shareholder approval. Shareholders deciding how to vote will weigh the gap between the $32.50 price and the analyst targets at or above $36 that the two firms cite from the negotiation period.