A number of law firms have started investigations into concerns over the financial impact of Ralcorp Holdings’ plan to buy American Italian Pasta Co. (AIPC) on the pasta supplier’s shareholders.

Six law firms have so far started investigations, after Ralcorp yesterday (21 June) announced plans to buy AIPC in a deal worth US$1.2bn.

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Lawyers at Robbins Umeda said it is investigating concerns over whether the board of directors of AIPC undertook a fair process to obtain fair consideration for all of the company’s shareholders.

“Specifically, our investigation concerns whether the company’s board of directors breached their fiduciary duties to AIPC shareholders by failing to adequately shop the company before entering into the transaction with Ralcorp. Notably, at least one analyst has set a price target of $60.00 per share, $7 above the amount offered by Ralcorp and accepted by AIPC’s board of directors,” the firm said.

Ralcorp will offer AIPC’s shareholders $53 a share and said it expects the deal to close during its fiscal fourth quarter, which closes on 30 September.

Litigation firm of Goldfarb Branham, also investigating the proposed buyout, said it is asking AIPC shareholders with questions or concerns about the proposed deal to contact the firm.

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“AIPC may not have adequately shopped itself before entering into this transaction and, pursuant to this tender offer, Ralcorp may be underpaying for AIPC, thus unlawfully harming AIPC shareholders,” Branham said.

The transaction is expected to close during Ralcorp’s fourth fiscal quarter ending 30 September and is subject to customary closing conditions and regulatory approvals, as well as a majority of the outstanding shares of AIPC common stock being validly tendered and not withdrawn in the tender offer.