Idenix Pharmaceuticals Inc. is undervalued by Merck & Co. (MRK)’s $3.9 billion takeover offer, a shareholder said in a lawsuit seeking to block the deal.
Merck, based in Whitehouse Station, New Jersey, said June 9 that it would acquire Idenix to expand its experimental pipeline for hepatitis C treatments. The proposed purchase price of $24.50 a share is more than triple Cambridge, Massachusetts-based Idenix’s closing level on June 6 of $7.23.
Merck is paying the highest premium on record for any health-care deal of at least $100 million, according to data compiled by Bloomberg. The price still fails to account for Idenix’s “intrinsic value” and resulted from a flawed process that prevents competing bids, investor Ronald Burns claimed in a complaint filed today in Delaware Chancery Court.
The deal includes a no-solicitation clause, grants Merck the right to match any superior offer and provides for a $115.6 million termination fee, according to the complaint. By accepting those terms, Idenix directors have “locked up” a sale to Merck, Burns said.
About 170 million people worldwide are infected with hepatitis C, a chronic disease caused by a virus that attacks the liver. Idenix’s lead drug, IDX21437, works by stopping the hepatitis C virus from replicating within the body.
The case is Burns v. Idenix Pharmaceuticals Inc. (IDIX), CA9764, Delaware Chancery Court (Wilmington).
To contact the reporter on this story: Sophia Pearson in federal court in Philadelphia at