According to a law firm press release, the complaint alleges despite NorthStar being well-positioned to generate significant earnings in the foreseeable future, the company's board has agreed to combine NorthStar with two weaker entities. Pursuant to the terms of the definitive merger agreement, NorthStar common stockholders will receive one share of their respective class of stock in the post-merger combined company, Colony NorthStar, Inc. The complaint alleges that the merger consideration is unfair to NorthStar common stockholders because they receive no premium for their shares. If the transaction is completed, NorthStar's executives will receive significant amounts in executive compensation.
The complaint further states that the proxy statement contains incomplete and misleading information concerning the financial projections for Colony, NorthStar, and NorthStar Realty Finance Corp., which were relied upon by the NorthStar board in assessing the fairness of the merger consideration and by the company's financial advisors, Evercore Group, L.L.C. and Goldman, Sachs & Co. in connection with preparing its fairness opinion; and certain information regarding the valuation analyses Evercore and Goldman Sachs performed in support of their fairness opinion. The complaint states that the inconsistencies between the projections disclosed in the proxy prevent stockholders from assessing the relative valuations of each company and the fairness of the exchange ratios.