CDK Global Inc. is being sued in federal court by a shareholder who alleges the company left out key information in its solicitation statement following its announced sale to Brookfield Business Partners.
CDK and Brookfield unveiled the planned $8.3 billion deal on April 7. Brookfield agreed to purchase all of CDK’s outstanding shares for $54.87 per share when the sale is completed this year.
Morgan Stanley & Co. and Paul, Weiss, Rifkind, Wharton & Garrison were financial and legal advisers for CDK, and Davis Polk & Wardwell was legal adviser for Brookfield.
The lawsuit — filed May 4 in the U.S. Eastern District of New York — names the automotive technology company and all nine of its board of directors as defendants. Matthew Hopkins, who owns CDK common stock, is listed as the plaintiff.
The suit alleges that following the announcement of the sale, the defendants on April 22 filed a statement with the U.S. Securities and Exchange Commission that contained information that was “false and misleading.”
The suit alleges the statement left out several technical disclosure details such as line items used to calculate projections, future financial projections and reconciliations of all non-GAAP metrics to GAAP metrics.
The suit contends the omissions violated the Securities Exchange Act of 1934.
Hopkins seeks to block the acquisition and calls for the filing of a new solicitation statement and a declaration that the defendants violated the act. If the sale to Brookfield moves forward, the suit asks the court to award “rescissory damages.”
Neither CDK nor attorneys representing Hopkins responded to Automotive News’ requests for comment in time for publication.