Arbitron shareholder Joseph Pace has filed a class action lawsuit seeking to halt the sale of the ratings company to Nielsen. The suit claims that a breakup fee and other terms of the deal prevent any competing offers to buy the company. Pace's suit claims that Arbitron's break-up fee of $32.7 million and a provision in confidentiality agreements signed by other bidders "ensure any legitimate bidder has been effectively shut out of the process." The lawsuit was filed in Delaware Chancery Court in Wilmington, Delaware. Pace is asking the court to stop Arbitron from closing the deal with Nielsen, until the company adopts procedures that will "obtain the highest possible price for shareholders." The complaint alleges that Arbitron's board breached their fiduciary duty by approving Nielsen's $48-per-share offer, in the deal announced in December, when Nielsen announced it had signed a definitive agreement to acquire Arbitron. Pace says in his court filing, "The proposed transaction is the product of a flawed process that is designed to ensure the sale of Arbitron to Nielsen on terms preferential to Nielsen, but detrimental to plaintiff and the other public stockholders of Arbitron. The proxy, which recommends that Arbitron shareholders vote in favor of the proposed transaction, omits and misrepresents material information about, among other things, the events leading up to the board's approval of the merger agreement and the financial analyses conducted."
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