Halper Sadeh LLC's M&A Probes: Navigating Fair Value and Shareholder Rights in Distressed Deals

The recent investigations by Halper Sadeh LLC into the proposed mergers of MRC Global Inc. (NYSE: MRC), Turnstone Biologics Corp. (NASDAQ: TSBX), and DNOW Inc. (NYSE: DNOW) underscore critical questions about fair valuation, shareholder rights, and the risks of milestone-dependent payouts in distressed M&A scenarios. For investors, these cases highlight the importance of scrutinizing transaction terms, understanding legal recourse, and weighing the potential for enhanced compensation. Below, we dissect the key issues and implications for shareholders.

The MRC-DNOW Merger: An 8.5% Premium, But at What Cost?

The proposed all-stock merger between MRC and DNOW, valued at $1.5 billion including debt, offers MRC shareholders 0.9489 shares of DNOW for each MRC share. This represents an 8.5% premium to MRC's 30-day VWAP. While this may seem favorable, the deal's fairness hinges on several factors:

1. Stock-Based Consideration Risks:
   The premium is calculated based on DNOW's stock price, which could decline if synergies—projected at $70 million annually within three years—fail to materialize. . As of June 2025, DNOW's valuation has been volatile, raising concerns about whether MRC shareholders are overexposed to post-merger risks.

2. Ownership Dilution:
   DNOW shareholders will own 56.5% of the combined entity, potentially diluting MRC shareholders' influence. This raises questions about whether MRC's board sufficiently negotiated protections for minority stakeholders.

3. Regulatory and Operational Hurdles:
   The merger faces antitrust scrutiny, given the companies' overlapping energy services businesses. A delayed or blocked deal could leave shareholders stranded in a “hold-up” scenario.

TSBX's CVR-Heavy Deal: Betting on Uncertain Milestones

Turnstone's sale to XOMA Royalty Corporation offers $0.34 in cash per share plus one non-transferable contingent value right (CVR). CVRs are notoriously risky, as their value depends on future events—such as drug approvals or sales targets—that may never materialize.

• CVR Reliability: Historical data shows that 40–60% of CVRs fail to pay out, with delays or missed milestones common in biotech deals. .
• Undervalued Equity?: At $0.34, Turnstone's cash consideration is a fraction of its recent trading price (~$1.50), suggesting the CVR's speculative nature may be masking a deeply discounted offer.

Halper Sadeh's Legal Playbook: Contingency Fees as a Catalyst

Halper Sadeh's investigations are notable for their focus on contingency fee litigation, which allows shareholders to pursue claims without upfront costs. This model incentivizes the firm to aggressively seek higher compensation, additional disclosures, or structural changes to merger terms.

• Potential Outcomes:
• Increased Consideration: For MRC, this could mean a higher stock ratio or cash sweetener. For TSBX, it might involve converting CVRs into immediate cash or equity.
• Enhanced Disclosures: Shareholders may demand clearer timelines for synergies, regulatory risks, or CVR milestones.

Investor Risks and Strategic Considerations

1. MRC Shareholders:
2. Monitor DNOW's stock performance and regulatory updates.

3. Engage with Halper Sadeh to explore class-action options if synergies are delayed or diluted.

4. TSBX Investors:

5. Recognize that CVRs are high-risk, low-liquidity instruments.

6. Pressure XOMA for clearer terms, such as cash-only options for CVR holders.

7. DNOW Shareholders:

8. Assess the 56.5% ownership stake's long-term value amid integration risks.
9. Demand transparency on debt levels and cost-savings timelines.

Investment Thesis: Proactive Engagement is Key

For all parties, the contingency fee model reduces barriers to legal action, making it rational for shareholders to seek better terms. Investors holding these stocks should:
- Demand clarity: Insist on detailed proxy statements and SEC filings.
- Leverage the firm's expertise: Contact Halper Sadeh to evaluate individual stakeholder positions.
- Avoid complacency: Even a small premium or CVR offer may be insufficient if execution risks are ignored.

.

Conclusion

Halper Sadeh's probes into these mergers are a wake-up call for investors to demand rigor in valuation and transparency in disclosures. In distressed M&A, shareholders must balance the urgency of a deal with the need for fair terms—especially when payouts depend on uncertain milestones or stock-based risks. Proactive engagement with legal experts like Halper Sadeh could be the difference between accepting a subpar deal and securing meaningful value.

For now, the message is clear: trust but verify, and never underestimate the power of contingency fee litigation to tilt the scales in your favor.