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Glazer Capital LLC has filed a $7.2 billion lawsuit in the Delaware Court of Chancery, seeking an appraisal of its 2.8 million shares in website-building platform Squarespace Inc. The lawsuit challenges the $46.50 per share price recently paid by Permira Advisers LLC in a take-private transaction, arguing that the amount undervalues the company.

Glazer $7.2B Lawsuit : Glazer’s Opposition to Permira’s Deal Terms

Glazer Capital, an investment management firm, had expressed opposition to the acquisition back in August, before Squarespace raised its offer from an initial $44 per share to $46.50. In its letter to Squarespace’s board, Glazer cited Goldman Sachs data spanning 16 years that supported a fair price range of $49.30 to $50.87 per share, with certain comparable transactions suggesting valuations as high as $59.19 per share.

The complaint characterizes the acquisition as a "controller squeeze-out," claiming that roughly $3 billion of the shares in the deal were held by stockholders who will have no ownership in the post-merger entity. This alleged squeeze-out structure, Glazer contends, undervalues the shares and disregards the interests of public investors.

Delaware’s Appraisal Rights and Case Background

Under Delaware corporation law, shareholders who disagree with merger offers can opt to reject them and pursue a Chancery Court appraisal to seek a higher payout. This process assesses the company’s unaffected price — the stock’s fair value before the deal announcement — and can include interest calculated from the transaction date.

In this case, Glazer and its associated funds are requesting the Delaware Chancery Court to reassess the per-share value, potentially securing a higher payment than Permira’s final offer.

Glazer $7.2B Lawsuit : Case and Legal Proceedings

The lawsuit, Glazer Enhanced Fund LP et al. v. Squarespace Inc., is filed under case number 2024-1137 in the Court of Chancery of the State of Delaware. This suit reflects a strategic push by Glazer to leverage Delaware’s appraisal rights in pursuit of what it considers a fairer valuation for its substantial stake in Squarespace.

As the court evaluates the suit, this case could impact shareholder rights in take-private transactions, particularly in instances where investors feel undervalued in deals involving private equity buyers.