A Westar shareholder has filed a lawsuit asking a U.S. District Court judge to stop the proposed merger of equals between Westar Energy and Great Plains Energy.
David Pill, a New York resident, demanded a jury trial in a class action lawsuit filed in the U.S. District Court for the District of Kansas in which he alleged the two companies withheld critical information that stockholders are entitled to as they make a decision about whether the merger should go forward.
Pill said the companies violated the Securities Exchange Act of 1934, and he named both companies, the Westar board of directors and the two companies set up solely for the merger, King Energy Inc. and Monarch Energy Holdings Inc. in the civil action.
Westar spokeswoman Jaycee Breese said the company does not comment on pending litigation.
“Of course, we’re disappointed to see the lawsuit filed, but lawsuits are not uncommon in connection with mergers,” she said.
In a 17-page document, Pill’s attorneys said Westar and GPE failed in their Securities & Exchange filings to include significant information that investors should have to make a decision on the case. The suit cites financial analyses and projections missing from the SEC filing that are a “material omission.”
Pill’s attorneys asked the courts to direct Westar and Great Plains to file SEC documents that do not “contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements contained therein not misleading.”
Westar and Great Plains also faced a lawsuit in 2016 during their first bid to merge operations. That merger, in which GPE would acquire Westar in a $12.2 billion deal, was denied by the Kansas Corporation Commission earlier this year. That lawsuit alleged that Westar leaders undervalued the company.