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BA Merchant Shareholders Sue BankAmerica

October 27, 1998|Bloomberg News

BA Merchant Services shareholders sued to block BankAmerica Corp.'s $252-million purchase of the one-third of the credit card processing company it doesn't already own, saying they aren't getting enough for their shares. BankAmerica's San Francisco-based Bank of America offered $15.50 for each Class A share of BA Merchant Services last week. The credit card company spun off from the bank two years ago. BankAmerica already owns all of BA Merchant Services Class B common shares, representing 66.6% of the smaller firm's capital. The offer was a 13.8% premium over BA Merchant Services' closing price of $13.63 on Thursday. The company's shares rose 29 cents to close at $16 on the NYSE. BankAmerica officials haven't factored BA Merchant Services' future growth prospects into their offer, the investors contend. They are asking a Delaware judge to stop the purchase and award unspecified damages. BankAmerica officials weren't immediately available for comment on the suit, for which the filers are seeking class-action status.

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