Discover Financial Services Faces Litigation Amid Proposed Merger with Capital One

Discover Financial Services (NYSE:DFS) is currently facing three lawsuits following its Agreement and Plan of Merger with Capital One Financial Corporation. The merger, dated February 19, 2024, involves Discover merging with Capital One and Discover Bank merging with Capital One’s national bank subsidiary. The board of directors of both companies unanimously approved the merger agreement.

In response to the proposed merger, Discover and Capital One have been challenged by three lawsuits questioning the merger’s legitimacy. In addition to the lawsuits, demand letters have been received alleging disclosure deficiencies in the joint proxy statement/prospectus regarding the mergers. Discover and Capital One maintain that these claims are baseless and that no additional disclosures are needed but are providing supplemental disclosures to minimize potential risks and uncertainties from the litigation.

The supplemental disclosures address various aspects of the merger, such as the background of the merger discussions, negotiation terms, termination fees, and regulatory approvals. The disclosures should be read in conjunction with the joint proxy statement/prospectus. Discover and Capital One stand firm that the proposed merger is in the best interest of both companies despite the legal challenges.

The disputes have led to measures to prevent any delays in the merger or negative implications on the deal by disclosing additional information to address concerns raised in the lawsuits. Discover and Capital One aim to address these issues promptly to advance with the merger process, subject to shareholder and regulatory approvals.

Investors and shareholders of both Discover and Capital One are advised to carefully review all related documents, including the joint proxy statement/prospectus, and to take all information into account before making any voting or investment decisions regarding the proposed transaction. For further details on the merger, interested parties can access information via the SEC’s database or contact the investor relations departments of either Discover Financial Services or Capital One Financial Corporation.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Discover Financial Services’s 8K filing here.

Discover Financial Services Company Profile

Discover Financial Services, through its subsidiaries, provides digital banking products and services, and payment services in the United States. It operates in two segments, Digital Banking and Payment Services. The Digital Banking segment offers Discover-branded credit cards to individuals; personal loans, home loans, and other consumer lending; and direct-to-consumer deposit products comprising savings accounts, certificates of deposit, money market accounts, IRA certificates of deposit, IRA savings accounts and checking accounts, and sweep accounts.