Diamondback Sued by Pension Fund Over $26 Billion Endeavor Deal

A pension fund sued Diamondback Energy Inc. on Thursday, challenging its planned $26 billion acquisition of Endeavor Energy Resources LP over provisions requiring Endeavor’s owner, billionaire oil tycoon Autry Stephens, to support Diamondback’s board.

The lawsuit, filed in Delaware, assails a stockholder agreement between Diamondback and Stephens, whose family will control 40% of the combined business. The transaction, expected to close in the fourth quarter, would allegedly make Diamondback the third-largest oil and gas producer in the Permian Basin, behind only Exxon Mobil Corp. and Chevron Corp.

The complaint takes aim at sections of the agreement that say the Stephenses ...