The recent $7.2 billion take-private buyout of Squarespace Inc. has come under scrutiny following a legal challenge from a pension fund concerned about the transaction’s fairness. The lawsuit, filed in Delaware’s Chancery Court, alleges that the deal, which involves a two-part sale to a consortium led by Permira Advisers LLC, may have been undervalued to benefit certain insiders at the expense of other shareholders.
This legal action, initiated on October 10, 2024, seeks access to internal documents from Squarespace. The pension fund raising these issues is particularly focused on the second stage of the transaction, which is anticipated to conclude shortly. This stage involves a short-form merger that would remove remaining public investors following a $46.50-per-share tender offer. Squarespace Inc. and its private equity backers, including notable financial entities, are at the center of this legal dispute, holding significant equity on both sides of the agreement.
The pension fund’s lawsuit underscores potential concerns about whether the transaction was truly arm’s length, given that insiders may have orchestrated a deal that disproportionately favored their interests. Such actions, if proven, could raise significant legal ramifications and governance questions within the sphere of corporate mergers and acquisitions. For further details regarding the ongoing legal process, the case can be tracked through the docket available on Bloomberg Law.