Former shareholders of Rentrak could receive around $19m to settle claims relating to the effect on share price of comScore's accounting investigation last year. The proposed settlement is currently seeking preliminary approval from a judge in Oregon.
Law firm Block & Leviton, which filed a motion seeking preliminary approval of the settlement last week, says it believes this to be 'one of (and perhaps the) largest cash settlement(s) in the history of merger-and-acquisition litigation' in the state.
comScore first announced its plans to buy the rapidly growing Rentrak in September 2015. The all-stock deal was valued at around $732m and was approved by shareholders the following January when comScore's share price was around $38.53. A few weeks later, the price tumbled 35% to $26.52 when it was disclosed that comScore's Audit Committee was reviewing 'certain potential accounting matters' - this referred to an investigation into wrongly stated results, due to the firm’s practice of reporting ‘non monetary’ revenue resulting from data-sharing agreements with other companies. Today shares are at $26.10 although they have remained volatile ever since the investigation was announced, and as recently as Feb 3rd 2017 were valued at $32.44. A report into the investigation was published in September.
Block & Leviton's Joel Fleming told DRNO the proposed settlement follows 'a stipulated agreement amongst the parties to the litigation, including plaintiffs, comScore, Rentrak, and certain former officers and directors of Rentrak', but requires approval from the Court because of its putative class action status. If the preliminary approval is granted, notice of the proposed settlement can be sent to members of the putative class - ie former Rentrak shareholders who received common stock of comScore in exchange for their Rentrak stock in the Transaction - who will be able to file claims for partial compensation for their losses from the settlement fund. Alternatively they can object to the proposed settlement or ask to be excluded from the class.
Granting of the settlement will not release officers and directors of comScore and its auditor Ernst & Young from other ongoing litigation.
Web site: www.comscore.com .