Shares of Virtusa Corporation (NASDAQ: VRTU) traded up 24.49% after it revealed that it has signed a merger agreement with private equity firm Baring Private Equity Asia (BPEA). Baring Private Equity Firm will buy Virtusa in an all-cash transaction valued at approximately $2.0 billion as per the agreement and Virtusa Corporation’s shareholders will secure $51.35 in cash for each share of Virtusa common stock they own.
Virtusa disclosed that its board has unanimously chosen the best offer out of a half-dozen offers they get to buy the company over the past two months. As per the agreement, the price per share represents a premium of approximately 27 percent which is to be paid in the transaction to the closing price of Virtusa common stock on September 9, 2020, and premiums of approximately 29 percent and 46 percent to Virtusa’s VWAP for the last 30 and 60 trading days, respectively.
Virtusa Inc will be able to settle all of its losses thanks to the premium they received after agreement with BPEA. Baring Private Equity firm has $20 billion of assets under its management and it is considered to be the largest private equity firm in Asia. The agreement between VRTU and BPEA is anticipated to conclude in the first half of 2021.
Shares of Virtusa Corporation soared 24.49% as it gained +9.92 at $50.42 during the trading session of Thursday. It has a day low and high range of $50.00 and $50.50, respectively. In the past 52-weeks of trading, this company’s stock has fluctuated between the low range of $19.48 and a high range of $52.81. It has moved up 158.83% from its 52-weeks low and moved down -4.53% from its 52-weeks high. Virtusa Corporation’s market capitalization has remained high, hitting $1.54 billion at the time of writing.
WeissLaw LLP has announced today that it has commenced the investigation against the Virtusa Corporation. WeissLaw said that there is a possibility that Virtusa breaches fiduciary duty and violated the law in connection with the proposed agreement with Baring Private Equity Firm. The Law Office of Brodsky & Smith, LLC disclosed today that it has also commenced the inquiry of potential claims against the Board of Directors of Virtusa Corporation.
The Law Office of Brodsky & Smith will inquire whether Virtusa Corporation breached its fiduciary duties to shareholders by failing to conduct a fair process or whether BPEA is paying less for the company. If we look at the financial considerations of the agreement, it is below the 52-week high of $52.81 for Virtusa shares.