The complaint alleges violations of state law by the Board of Directors of Duncan relating to the proposed acquisition of the company by Enterprise Products Partners, L.P. ("Enterprise") (NYSE: EPD). The complaint alleges that Duncan's Board of Directors breached their fiduciary duties by failing to maximize shareholder value, among other things.
According to the complaint, on February 23, 2011, Enterprise proposed consideration of 0.9545 common units of Enterprise for each outstanding common unit of Duncan, which represents a value of approximately $42.00 for each Duncan common unit, in a transaction to be structured as a merger of Duncan with a wholly-owned subsidiary of Enterprise. The complaint states that Enterprise, through its wholly-owned subsidiary Enterprise Products Operating LLC, beneficially owns 100% of Duncan's general partner, DEP Holdings, LLC ("DEP GP"), and currently owns 58.5% of Duncan's common units.
The complaint alleges that, due to Enterprise's control of Duncan and DEP GP, Duncan and its Board of Directors have engaged in conduct that has allowed them to stand on both sides of the proposed transaction, negotiating for their benefit to the detriment of Duncan's public shareholders. Moreover, the complaint alleges that the Board has conflicts of interest that put them at odds with Duncan's public shareholders and that the Board's dual loyalties to Enterprise and Duncan make it impossible for them to consider the fairness of the proposed transaction in a way that benefits Duncan and its shareholders.
