A US law firm has claimed it is investigating the conduct of Nasdaq-listed MGO Global following the announcement of its merger with tanker and bulker manager Heidmar.
The deal, announced on Thursday, will see Greece’s Heidmar obtain a US stock listing by effectively taking over the digital lifestyle brand company.
Milwaukee law firm Ademi said its probe centres on any potential “breaches of fiduciary duty and other violations” in the reverse merger.
“MGO Global insiders will receive substantial benefits as part of change of control arrangements,” Ademi added.
“We are investigating the conduct of MGO Global’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.”
The company says it is a specialist in shareholder litigation involving buyouts, mergers and individual shareholder rights.
MGO and Heidmar have been contacted for comment.
One shipping sector observer characterised the probe as “sheer opportunism”.
News of the transaction sent the MGO stock soaring from the $0.46 level it was trading at when the announcement was made.
At one point on Thursday, the share was up 129% to $1.05 in New York.
Heidmar shareholders will receive stock worth $300m in the combined company, and potentially $30m more if profit or revenue targets are met.
MGO investors will end up with 5.6% of the new entity, and shares implying a fully diluted equity value of $18m.
Second time lucky?
The transaction will be completed at a significant premium to MGO’s stock price, Heidmar said.
MGO was founded by Maximiliano Ojeda.
The deal is pool player Heidmar’s second attempt at a US listing.
It dropped plans last year to list on the Nasdaq through a merger with a special purpose acquisition vehicle, Home Plate Acquisition.
Market conditions were not conducive, it said at the time.
The deal was announced in March 2023.
The object was to raise $55m to fund an expansion into technical management, shipbroking and bulkers.
Heidmar has more than 60 vessels under management, including crude oil and refined petroleum product tankers, with an aggregate capacity of 8.3m dwt.
