Blackboard Inc. Sued by Investor Over $1.64 Billion Providence Buyout Bid

Blackboard Inc. (BBBB), an educational- software maker, was sued in Delaware Chancery Court by an investor contending the company’s stock is undervalued in a proposed $1.64 billion buyout by Providence Equity Partners Inc.

The company is being sold through “an unfair process and for an unfair price,” shareholder Astor BK Realty Trust contends in a complaint filed today in Wilmington, Delaware.

“Indeed, one analyst, Wedbush, believes that Blackboard is worth at least $50 to $65 per share as a takeover target,” Astor lawyers said in court papers.

The Providence, Rhode Island-based investment firm agreed July 1 to buy Blackboard, of Washington, for $45 a share in cash, a 21 percent premium at the time.

Astor is seeking class-action or group status for the lawsuit on behalf of common stockholders and an order to stop the buyout or award damages.

Michael Stanton, a spokesman for Blackboard, didn’t immediately return a call seeking comment on the suit.

Blackboard rose 2 cents to $44.20 at 12:48 p.m. in Nasdaq stock market trading.

The case is Astor BK Realty Trust v. Chasen, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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