OptionsXpress Shareholders Challenge $1 Billion Sale to Charles Schwab

OptionsXpress Holdings Inc. investors filed three lawsuits challenging Charles Schwab Corp. (SCHW)’s plan to buy the retail options brokerage for about $1 billion in stock, claiming the board failed to get the best possible price.

The trio of lawsuits, filed yesterday and today in Illinois state court in Chicago, where OptionsXpress is based, claim the company’s directors breached their fiduciary duties to shareholders. Each complaint seeks a court order blocking the transaction.

Schwab, the largest independent broker by client assets, announced the deal in a statement jointly issued yesterday by the San Francisco-based company and OptionsXpress.

The agreed-upon $17.91-a-share value of the transaction “substantially undervalues the company and is merely an attempt by Schwab to acquire OptionsXpress for a bargain during a temporary downturn in the economy,” according to one complaint. OptionsXpress closed March 18 at $15.33 in Nasdaq Stock Market trading.

The plaintiffs in each case seek class-action, or group, status on behalf of all OptionsXpress investors who were allegedly harmed in the transaction.

Named as defendants in each of the complaints are OptionsXpress Chairman and co-founder James A. Gray, Vice- Chairman and co-founder Ned W. Bennett, and six other directors. Schwab, too, is a defendant in each case.

Greg Gable, a spokesman for Schwab, said it was against company policy to discuss pending litigation and declined to comment. Patrick Van De Wille, an outside spokesman for OptionsXpress, didn’t immediately reply to after-hours voice- mail and e-mail messages seeking comment.

The cases are Thomas v. OptionsXpress Holdings Inc. (OXPS), 11ch10898, Page v. OptionsXpress Holdings Inc., 11ch10845, and Kolton v. Gray, 11ch10657, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

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