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May 19 — An investor has sued Perrigo Co., alleging the over-the-counter drugmaker violated federal securities laws by misrepresenting the strength of its business while trying to convince shareholders to reject Mylan NV's takeover bid late last year.
Perrigo and former chief executive officer Joseph Papa made false and misleading statements, including that the Mylan offer was inadequate, Roofers' Pension Fund said in a would-be class action filed May 18 at the U.S. District Court for the District of New Jersey.
The misstatements ultimately caused a majority of shareholders to reject Mylan's $26 billion offer, the investor said.
A Perrigo representative declined to comment on the lawsuit.
Papa left Perrigo in April to become the new CEO of Valeant Pharmaceuticals International Inc.
Mylan had offered $75 in cash and 2.3 Mylan shares for each Perrigo share. The companies engaged in a war of words over Mylan's repeated offers, at one point counter-suing each other in federal court over alleged misstatements (59 CARE 59, 11/2/15).
In November 2015, Mylan's tender offer was rejected by a majority of Perrigo shareholders (68 CARE, 11/16/15).
According to the complaint, Perrigo and Papa made materially misleading statements and omissions and “engaged in a scheme to deceive the market” in order to defend against Mylan's proposal. The investor claimed the misrepresentations were disclosed when Perrigo reported lower-than-expected earnings in February, and announced a first-quarter net loss of $0.93 per share earlier this month, after which the company's stock price fell steeply.
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The complaint is available at http://www.bloomberglaw.com/public/document/ROOFERS_PENSION_FUND_v_PAPA_et_al_Docket_No_216cv02805_DNJ_May_18/1.
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