Court Approves Class Settlement in In Re Nationwide Financial Services Litigation

8/19/2009 - Barrack, Rodos & Bacine, counsel for plaintiff International Brotherhood of Electrical Workers Local 98 Pension Fund (IBEW Local 98), in In Re Nationwide Financial Services Litigation, Case No. 2:08-CV-00249, announces that the Honorable Michael H. Watson of the United States District Court for the Southern District of Ohio has granted final approval of the settlement reached in the case. The case arose from a proposal from Nationwide Mutual Insurance Company, Nationwide Mutual Fire Insurance Company and Nationwide Corporation to acquire by merger all outstanding shares of Nationwide Financial Services, Inc. (NFS) for $47.20 in cash. Plaintiffs alleged that the companies and members of the NFS board of directors breached fiduciary duties owed to holders of NFS Class A shares. Under the settlement, the merger price increased $5.05 per share to $52.25 (a 10.7 percent increase) for a total value of $2.4 billion and additional disclosures were made in the final proxy statement issued to NFS shareholders.

 As Judge Watson wrote in the opinion approving the settlement: “the Settlement provides Plaintiffs and the Class with very significant economic and non-economic benefits, which include (a) an increased share price of $52.25, an increase of $5.05 from $47.20 per share — an aggregate economic benefit of $232.8 million …; and (b) additional, material information that was included in the final proxy statement issued to NFS shareholders in connection with the Merger …. The additional disclosures provided the Class with material information about NFS’s financial projections and valuation, as well as additional details of the merger process, …, all of which enable Class members to make a more informed decision about whether they were receiving fair value for their shares. As note by Plaintiffs’ financial advisor in his Affidavit, the additional disclosures provided members of the Class with significant additional information upon which to assess the Proposed Merger at the revised offer price.”

 Judge Watson further found that through all of their efforts and analyses, “Plaintiffs and their counsel have made a thoroughly considered judgment that the Settlement is not only fair, adequate and reasonable, but an excellent result for the Class. The $52.25 per share revised offer was 12% more than NFS’s closing price on August 6; it was 10.7% higher than Nationwide Mutual’s initial offer of March 10, 2008 (providing an aggregate benefit of $232.8 million to the members of the Class); and it was negotiated in the midst of an overall decline in the financial markets, and apparently while internal forecasts for NFS indicated some decline in its projected results.” Finally, specifically citing BR&B’s written submissions to the Court and presentation at the settlement hearing, Judge Watson found “the quality and skill in the work performed by Plaintiffs’ Counsel is evident through the significant economic and non-economic recovery achieved in this Action.”