Kendall Law Group Announces Shareholder Investigation into Allied Capital Corporation

October 26, 2009 3:56 PM EDT

DALLAS--(BUSINESS WIRE)-- Kendall Law Group, led by a former federal judge and former US Attorney, announces a shareholder investigation into the Board of Directors of Allied Capital Corporation (NYSE: ALD) in connection with the proposed acquisition by Ares Capital Corporation expected to close by the end of the first quarter.

On October 26, 2009, Ares announced its plan to purchase Allied, a private equity firm specializing in investments in small and middle market companies, in an all-stock transaction valued at $648 million. According to the agreement, Allied stockholders will receive 0.325 share of Ares per Allied stock owned. The deal gives Ares shareholders approximately 65 percent stake of the combined company, with Allied stockholders owning the remaining 35 percent. The combined company is expected to include one board member of Allied, while Ares Chairman Bennett Rosenthal, President Michael Arougheti and Chief Financial Officer Richard Davis will continue in their respective roles.

Based on the closing price of $10.69 for Ares stock on the last trading day before the announcement, this deal values Allied stock at $3.47 per share, while Allied shares were trading at $4.10 per share as recently as August 3, 2009 and at a 52-week high of $7.87. Since the average share price of Ares capital stock during the six months prior to the announcement is approximately $8.77, Allied stock could be valued at only $2.85 per share.

Kendall Law Group's investigation concerns whether the consideration to be paid to shareholders is below the fair or inherent value of the Company and whether the directors and may have breached their fiduciary duties by not acting in the shareholders' best interests in connection with the sale process.

Kendall Law Group has nationwide experience representing investors in mergers and acquisitions. For information about your rights as an ALD shareholder, contact attorney Hamilton Lindley at 877-744-3728 or by email at hlindley@kendalllawgroup.com.

    Source: Kendall Law Group

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