Core Scientific issues supplemental merger disclosures amid shareholder lawsuits

Core Scientific, Inc. (NASDAQ:CORZ), which has seen its stock surge 174% over the past six months according to InvestingPro data, released supplemental disclosures Wednesday regarding its pending merger with CoreWeave, Inc., following lawsuits and demands from shareholders over the adequacy of proxy statement information. The company, currently valued at approximately $5.9 billion, provided these details in a press release statement filed with the U.S. Securities and Exchange Commission.

The company stated that, after announcing the merger agreement on July 7, two purported shareholders filed a lawsuit in Connecticut and two others filed separate lawsuits in New York, all alleging deficiencies or incomplete information in the proxy statement related to the merger. As of this report, all three lawsuits remain pending. In addition, Core Scientific has received demand letters from other shareholders raising similar concerns.

Core Scientific, CoreWeave, and other defendants named in the lawsuits have denied any wrongdoing, asserting that the disclosures comply with applicable law. To address the claims and avoid potential delays, the companies have voluntarily agreed to supplement the proxy statement with additional information.

The new disclosures include a breakdown of the estimated value of unvested restricted stock units (RSUs) that would vest for each non-employee Core Scientific director if the merger closes. The values are as follows: Jeff Booth, Jordan Levy, Yadin Rozov, and Eric Weiss would each receive $1,972,906, while Elizabeth Crain would receive $623,952.

The supplemental filing also amends financial tables and methodologies used in the financial advisors’ opinions regarding the merger. Updated comparative financial analyses now include revised total enterprise value (TEV) and TEV/Adjusted EBITDA multiples for selected peer companies such as Equinix, Digital Realty, and others, as well as for Core Scientific and CoreWeave.

The company reiterated that it may not announce additional similar complaints or demands unless legally required. The supplemental disclosures are intended to address shareholder concerns and do not constitute an admission of the materiality or necessity of any additional disclosures under the law.

This information is based on a press release statement filed with the SEC. For investors seeking deeper insights, InvestingPro offers comprehensive analysis of Core Scientific’s financial health, including 10+ additional ProTips and detailed valuation metrics in its Pro Research Report, part of the coverage of 1,400+ US stocks.

In other recent news, proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended that Core Scientific shareholders vote against the proposed merger with CoreWeave. This recommendation was echoed by Two Seas Capital, one of Core Scientific’s largest shareholders, who expressed concerns about the deal’s valuation and structure. Two Seas Capital has urged shareholders to reject the acquisition, arguing that the deal undervalues Core Scientific, especially given the recent surge in equity values in the high-performance computing data center sector. Despite these objections, CoreWeave has reaffirmed its commitment to the acquisition and encouraged shareholders to support the transaction. CoreWeave has also addressed statements from Two Seas Capital, labeling them as inaccurate. Additionally, CoreWeave CEO Michael Intrator has stated that there are no plans to revise the current acquisition offer, asserting that it adequately represents Core Scientific’s value. These developments come as Core Scientific prepares for a special shareholder meeting to vote on the merger.

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