Ademi LLP is investigating Primo Water (NYSE: PRMW) (TSX: PRMW) for possible breaches of fiduciary duty and other violations of law in its transaction with BlueTriton.
In the transaction, Primo Water shareholders will exchange their shares into shares of a new holding company. Upon closing of the transaction, Primo Water shareholders and holders of incentive equity are expected to own 43% of the fully diluted shares of NewCo, and BlueTriton shareholders are expected to own 57% of the fully diluted shares of NewCo. The transaction agreement unreasonably limits competing transactions for Primo Water by imposing a significant penalty if Primo Water accepts a competing bid. Primo Water insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Primo Water’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.