Protective Life Corp. is being sued by a shareholder who says a proposed $5.7 billion purchase of the company by Dai-ichi Life Insurance Co. is unfair to investors because other potential bidders were locked out.
Dai-ichi, the nation's second-largest life insurer, announced last month that it would pay $70 a share in cash for Alabama-based Protective to expand its business in the U.S.
The deal, scheduled to close by the end of 2014 or early 2015, is flawed because Dai-ichi is the only company Protective negotiated with, the investor, Samuel Leyendecker Jr., said in a complaint filed Tuesday in Delaware Chancery Court.
The purchase is important to Dai-ichi because the U.S. accounts for about 22 percent of the global insurance market and is expected to continue to grow faster than Japan, where the shrinking population is eroding demand.
Leyendecker said in his complaint that Protective directors failed to maximize shareholder value while locking up the transaction with deal-protection devices that preclude other bidders. Leyendecker seeks to represent all shareholders in his bid to block the deal.
David Millar, a spokesman for Protective Life at Sard Verbinnen & Co., declined to comment on the complaint.