As we reported earlier this month, mammoth Warner Music Group was up for auction -- supposedly to the highest bidder, but that's not how it went down, according to a class action lawsuit filed yesterday by WMG stock holder Derek Cournoyer.
The lawsuit, filed against Warner Music Group CEO Edgar Bronfman Jr., alleges that the WMG board of directors accepted a $3.3 billion dollar bid from Access Industries rather than a higher offer from brothers Tom and Alec Gores.
Access Industries is owned by Len Blavatnik, a personal friend of Bronfman's and a former member of the WMG board. The claim alleges that Blavatnik's friendship with Bronfman was a major factor in the board's decision to accept his offer.
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This is the second class action lawsuit filed against WMG in regards to the company's sale. The first was filed in Delaware last week by shareholder Barbara A. Varipapa. Her suit alleges that the company's shares were undervalued. According to the suit, "The company's shares are already locked up in favor of the proposed transaction, rendering the minority shareholders' vote meaningless."
The lawsuits aim to delay completion of Warner Music Group's sale to Blavatnik, and provide damages to the plaintiffs.