Acquisition Chelsea Therapeutics International, Ltd by H. Lundbeck A/S May Not Be in Shareholders' Best Interests
SAN DIEGO and CHARLOTTE, N.C., May 12, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Chelsea Therapeutics International, Ltd (NASDAQ: CHTP) by the private equity firm H. Lundbeck A/S. On May 8, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Lundbeck will commence a tender offer for all outstanding shares of Chelsea Therapeutics. Under the agreement, Chelsea Therapeutics shareholders will receive $6.44 in cash for each share of common stock as well as contingent value rights (CVRs) worth up to $1.50, for a total possible consideration of $7.94.
Is the Proposed Acquisition Best for Chelsea Therapeutics and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors Chelsea Therapeutics is undertaking a fair process to obtain maximum value and adequately compensate Chelsea Therapeutics shareholders.
As an initial matter, the possible $7.94 merger consideration is significantly below the target price set by at least three different analysts, including a target price of $12.00 set by an analyst at JMP securities and a price of $10.00 set by an analyst at Needham and Co. In addition, on February 18, 2014, the company announced that the U.S. Food and Drug Administration granted accelerated approval of NORTHERATM (drioxdiopa) for the treatment of symptomatic neurogenic orthostatic hypotension. According to the company, NORTHERA is the only therapy approved by the FDA to demonstrate symptomatic benefit in patients with neurogenic orthostatic hypotension and represents a "significant marketing opportunity" for the company.
Given these facts, Robbins Arroyo LLP is examining the Chelsea Therapeutics board of directors' decision to sell the company to Lundbeck. Chelsea Therapeutics shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. Chelsea Therapeutics interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, firstname.lastname@example.org, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The law firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP