United States Court of Appeals For the Seventh Circuit ____________________ No. 19‐2973 MICHAEL KUEBLER, et al., Plaintiffs‐Appellants, v. VECTREN CORPORATION, et al., Defendants‐Appellees. ____________________

Appeal from the United States District Court for the Southern District of Indiana, Evansville Division. No. 3:18‐cv‐00113‐RLY‐MPB — Richard L. Young, Judge. ____________________

ARGUED SEPTEMBER 18, 2020 — DECIDED SEPTEMBER 13, 2021 ____________________

Before SYKES, Chief Judge, and HAMILTON and ST. EVE, Cir‐ cuit Judges. HAMILTON, Circuit Judge. This securities case arose from the 2018 merger between Vectren Corporation, an Indiana public utility and energy company, and CenterPoint Energy, Inc., a public utility holding company. CenterPoint eventually acquired all Vectren stock for $72.00 per share in cash. In the meantime, however, several Vectren shareholders filed this 2 No. 19‐2973 suit alleging violations of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78a et seq. First, the shareholders tried to enjoin the shareholder vote on the merger. The district court denied that request. The shareholders then filed an amended complaint alleging that Vectren’s Proxy Statement was misleading in violation of Sec‐ tion 14(a) of the Exchange Act, § 78n(a). Plaintiffs argued that the Proxy Statement should have included two omitted finan‐ cial metrics used by Vectren’s financial advisor in its analysis leading to its opinion that the merger terms were fair to Vec‐ tren shareholders. The first omitted metric, Unlevered Cash Flow Projections, forecast the gross after‐tax annual cash flow for Vectren between 2018 and 2027. The second omitted met‐ ric, Business Segment Projections, showed separate financial projections for each of Vectren’s three main business lines. Without this information, the shareholders allege, they were unable to assess the fair value of their Vectren shares be‐ cause they could not replicate the adviser’s valuation analysis. In other words, the shareholders believe that the adviser un‐ dervalued their Vectren shares, and they wanted to double‐ check its work. The district court granted Vectren’s motion to dismiss, finding that the shareholders had failed to allege ad‐ equately both materiality of the omissions and any resulting economic loss. We affirm. I. Factual Background A. The Merger We review de novo a district court’s decision on a motion to dismiss for failure to state a claim under Rule 12(b)(6), treat‐ ing plaintiffs’ well‐pleaded factual allegations as true and giv‐ ing the plaintiffs the benefit of reasonable inferences from No. 19‐2973 3 them. Manistee Apartments, LLC v. City of Chicago, 844 F.3d 630, 633 (7th Cir. 2016). In late 2017, Vectren began to explore the possibility of a strategic merger. In January 2018, Vectren retained Merrill Lynch as its financial advisor and directed it to contact parties who might be interested in acquiring Vectren. Vectren’s board of directors told Merrill Lynch to tell potential buyers that the board strongly preferred a transaction in which a substantial portion of the consideration would be paid in cash rather than other securities. By February 2018, Vectren had narrowed the pool of inter‐ ested buyers to four serious contenders: CenterPoint and three others that we refer to as Bidders A, B, and D. On Feb‐ ruary 21, all four submitted non‐binding proposals. Center‐ Point proposed an all‐cash transaction at $70.00 per share. Bidder A proposed a price of $72.50 per share with up to 83 percent in cash and the remainder in common stock of Bidder A. Bidder B proposed an all‐c