Yesterday, Anthony Morgan filed a complaint in the District of Delaware against Kindred Biosciences, Inc. and its senior executives for violating the Securities Act by providing allegedly misleading information about an upcoming merger with Elanco Animal Health Incorporated.
On June 16, the complaint explained, Elanco and Kindred announced a merger agreement, where each Kindred shareholder will receive $9.25 in cash for each share of Kindred common stock they own. On July 21, Kindred filed a Schedule 14A Definitive Proxy Statement with the SEC, recommending that “Kindred stockholders vote in favor of the Proposed Transaction.”
According to the complaint, the Proxy Statement “omit[ted] or misrepresent[ed] material information necessary and essential to that decision.” The plaintiff alleged that the statement failed to discuss “Kindred’s financial forecasts; the financial analyses performed by Kindred’s financial advisor, Barclays Capital Inc., in connection with its fairness opinion; potential conflicts of interest involving Company management; and the background of the Proposed Transaction.”
The plaintiff claimed that financial advisor Barclay’s fairness opinion “fails to include key inputs and assumptions underlying these analyses,” and that without this information “Kindred’s public stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Barclays’ fairness opinions in determining whether to vote in favor of the Proposed Transaction.” The fairness opinion also allegedly did not disclose projected after-tax unlevered free cash flows, the terminal value, net cash and other important metrics. As a result, the plaintiff claimed that these actions are in violation of the Exchange Act.
Morgan is seeking declaratory and injunctive relief enjoining the defendants from concluding the merger, and rescissory damages if it goes through, attorney’s fees and costs, and other relief.
The plaintiff is represented by The Law Office of Brian Long.
