Acceleron and Merck Merger Contested in Court by Shareholder

On Wednesday, Elaine Wang, a shareholder, filed a complaint in the Southern District of New York against Acceleron Pharma Inc. and members of its Board for alleged violations of the Securities Exchange Act for a proposed merger with a subsidiary of Merck & Co., Inc.

On September 30, the complaint said, Merck announced a proposed merger where their subsidiary company would wholly acquire Acceleron for $11.5 billion, stating that “Acceleron’s innovative research has yielded an exciting late-stage candidate that complements and strengthens our growing cardiovascular portfolio and pipeline and holds the potential to build upon Merck’s proud legacy in cardiovascular disease.”

Under the deal, court documents state, Merck would buy out all shares of Acceleron and would complete the transaction in the fourth quarter of 2021. On October 12, Acceleron filed a Solicitation Statement with the SEC which was “furnished to the Company’s stockholders and solicit[ed] the stockholders to tender their shares in support of the Proposed Transaction.” In the complaint, the plaintiff alleged that the statement “misrepresents and/or omits material information that is necessary for the Company’s stockholders to make an informed decision concerning whether to tender their shares.” 

The complaint alleged that the Solicitation Statement failed to disclose discount rates, stock price targets, Wall Street research, transactions observed and more, resulting in an “omission of the above-referenced information renders statements in the Solicitation Statement materially incomplete and misleading in contravention of the Exchange Act.” Thus, the plaintiff is suing on the counts of violations of Sections 14(e), 14(d)(4) and 20(a) of the Securities Exchange Act.

The plaintiff is seeking a preliminary and permanent injunction enjoining the defendants “from proceeding with, consummating, or closing the Proposed Transaction, unless and until Defendants disclose the material information identified above which has been omitted from the Solicitation Statement,” rescinding the Merger Agreement or granting them rescissory damages, attorney’s fees and costs, and other relief.

The plaintiff is represented by Melwani & Chan LLP.