A Teekay LNG shareholder is accusing the gas carrier owner's board of improperly pursuing a deal that ultimately ended with a $6.2bn take-private merger .
Michael Sams of Tennessee filed suit in the US federal court for the Southern District of New York, alleging the process in soliciting and vetting the deal with Stonepeak Infrastructure Partners was "flawed and inadequate" as parent Teekay Corp moved to sell its non-controlling stake in Teekay LNG before contacting Teekay GP's board about selling the entire company.
The transaction was ultimately worth $4.1m to directors and executives in the Teekay group, Sams alleged.
"While the proposed transaction is not in the best interests of Teekay LNG, plaintiff or partnership unitholders, it will produce lucrative benefits for the partnership's officers and directors, as well as for Teekay Corp," the lawsuit, filed on 18 November, read.
Defendants in the lawsuit include Teekay LNG director and Teekay GP chair Kenneth Hvid and Teekay GP directors Sean Day, Alan Semple, David Schellenberg, Richard Paterson and Slyvia Barnes, as well as Teekay LNG itself.
Sams alleges Teekay Corp engaged Morgan Stanley as a financial advisor to help it sell its stake before being tapped as Teekay GP board's financial advisor on the merger, posing a conflict of interest.
He further alleges the proxy statement Teekay LNG filed with the Securities and Exchange Commission is inadequate, leaving out several key financial projections.
Sams seeks to block the transaction, force Teekay LNG to publish a more detailed proxy statement and recoup legal costs.
Teekay LNG and Stonepeak announced the merger in October, with Stonepeak buying out all the shipowners' New York-traded shares for $17 each.
The deal took all Teekay LNG shares off the New York Stock Exchange but left its preferred units to be traded publicly.
It was one in a spate of merger and acquisition deals in the LNG shipping space, with Golar LNG Partners sold to New Fortress Energy, GasLog sold to a BlackRock fund and delisted and Oslo-listed Hoegh LNG Partners sold to Morgan Stanley Infrastructure Partners.
Shareholder lawsuits are common following merger and acquisition deals.
Teekay did not return a request for comment.
