Ticketmaster Entertainment Inc. shareholders have filed a class action lawsuit claiming the Hollywood company sold itself too cheaply to Live Nation Inc.
Ticketmaster, the world's largest ticket broker, announced on Feb. 10 a merger with Beverly Hills' Live Nation, the world's largest concert promoter, to form Live Nation Entertainment.
In the suit, which was filed on Friday in Los Angeles Superior Court, Ticketmaster shareholders allege in court documents that Ticketmaster executives exploited the temporary downturn in the company's share price, off almost 40 percent in the last three months, and secured benefits for themselves outside of the deal to the detriment of Ticketmaster's public shareholders.
The $2.5 billion all-stock deal calls for Ticketmaster shareholders to receive 1.38 shares of Live Nation Entertainment stock for every share of Ticketmaster they own.
Neither the San Diego attorneys representing Ticketmaster shareholders nor Ticketmaster representatives returned calls seeking comment.
Ticketmaster shareholders are asking a Los Angeles state court judge to block the deal, which is pending regulatory review by the Justice Department's antitrust division.
Before last week's announcement, Ticketmaster and Live Nation were more rivals than the partners. Live Nation entered the ticketing business a little over one month ago, and Ticketmaster made a push into managing music talent in October when it took a controlling stake in Front Line Management Group Inc. However, analysts said that the nation's economic problems likely prompted the deal.
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