Plaintiffs did prove a reasonable likelihood of success with showing that directors violated fiduciary duties.
Amgen can proceed with its planned $1.16 billion acquisition of Micromet, as a group of Micromet shareholders failed to persuade a Delaware judge to stop the sale as they had hoped. Instead, Delaware Chancery Court Vice Chancellor Donald F. Parsons Jr. rejected the plaintiff group’s request for a preliminary injunction.
The court said that the plaintiffs were not able to prove a reasonable likelihood of success with proving Micromet directors violated their fiduciary duties including disclosure obligations. The plaintiffs had argued that Micromet’s board had not adequately shown that could not find a better offer than the one it accepted from the biotech giant. Plaintiffs asserted that Micromet unreasonably sought to protect its deal with Amgen through measures aimed at thwarting potential competing bids and through failure by the board to disclose best-case or “upside” financial projections potentially warranting a higher price.
The court case, Passes v. Micromet, Inc. is one of eight class action lawsuits filed by Micromet shareholders in Delaware and Maryland courts since Amgen’s plan to acquire Micromet was announced January 26. One of the Maryland cases offered additional details, alleging that Micromet’s board blocked other potential buyers from accessing confidential information necessary for them to make a bid; allowed Amgen four business days to match any competing proposal that could’ve been made; and agreed to pay Amgen a $40 million termination fee.
“They pushed it through. There was almost no market check,” Jason Leviton, an attorney for the shareholders, told the Associated Press.
In his decision, Parsons sided with arguments by Amgen and Micromet. He agreed with them that the sale should proceed since Amgen’s offer price of $11 per share for Micromet was 33% above the closing price for company shares the day before both companies announced the acquisition. Micromet’s closing share price has inched up since to $10.99 on February 27 and $11 at the start of trading March 2. Over the past year, Micromet shares traded as low $4.13.
Amgen’s offer was “an incredible premium” for Micromet shareholders, Micromet attorney Koji Fukumura argued at a Monday hearing, according to the AP. More importantly, said he and Amgen attorney Robert Sacks, Micromet reached out to seven pharmaceutical companies, none of which showed interest in making a competitive bid. Parsons also concluded that the sale process leading up to the deal was reasonable, and that the board was sufficiently independent to approve the deal.
Amgen’s tender offer of $11 per share expired at midnight Thursday, heightening the urgency of resolving the Delaware case. In a statement today, Amgen said all outstanding conditions were satisfied, allowing it to proceed with its planned acquisition of all outstanding shares of Micromet common stock by a wholly owned subsidiary. Amgen said approximately 80,025,097 Micromet shares representing about 83.95% of the company’s outstanding shares were validly tendered and not withdrawn, with another approximately 3,150,586 additional Micromet shares tendered by guaranteed delivery. Amgen also said it launched a subsequent offering period set to expire at midnight March 6.