(CN) - Shareholder filed a class action against generic drug-maker Par Pharmaceutical Companies over a $50 per share buyout offer from TPG Capital, Skygrowth Holdings and Skygrowth Acquisition Corp.
The company, according to the complaint, "develops, manufactures and markets difficult to formulate, high-barrier-to-entry generic drugs ... and niche, innovative proprietary pharmaceuticals." Plaintiff claims that on July 16, Par Pharma announced it was entering into a buyout agreement worth about $1.84 billion. The deal allegedly undervalues the company, while the offer represents a 37 percent premium based on trading prices the day before the merger announcement.
"In addition to accepting a low price, the Board allowed a conflicted financial adviser ... to advise it on the deal," the complaint states. Some analysts had pegged the value of the shares in the event of a takeover as high as $67 per share and "the Company, which is among the top five in U.S. sales among all generic drug companies in 2011, would give any strategic acquirer a powerful and immediate foothold into the U.S. pharmaceuticals market."
Lead plaintiff KBC Asset Management alleges that the Par's board agreed to preclusive protection devices, including a go-shop policy, a no-shop clause after 40 days, and a termination fee of up to $48 million. Plaintiff claims that "these provisions cannot be justified as reasonable or proportionate."
Prior to the announcement of the buyout, Par Pharma touted its first quarter 2012 earnings, boasting sales of more than $271 million, a 37 percent jump from the previous year, noting that "prospects have been steadily tracking upwards."
If the deal pushes ahead, plaintiff and other investors will be "irreparably" injured, and claim defendants have failed to "maximize the value" of the company for shareholders, failed to "properly value the company," the complaitn states.
Plaintiff is represented by Carmella P. Keener and P. Bradford deLeeuw of Rosenthal, Monhait & Goddess P.A. in Wilmington, Del.