April 12 (Bloomberg) -- An Inspire Pharmaceuticals Inc. shareholder filed a lawsuit claiming Merck & Co.’s $430 million offer for the company is inadequate.
Company directors breached their fiduciary duties by accepting a price that undervalues the company and agreeing to lock up the proposed transaction with deal protection devices, shareholder Anthony S. Luttenberger said in a complaint made public today in Delaware Chancery Court in Wilmington. The suit names both Inspire and Merck.
“These provisions substantially and improperly limit the board’s ability to act with respect to investigating and pursuing superior proposals and alternatives,” Luttenberger said in the complaint.
Merck, based in Whitehouse Station, New Jersey, said it will pay $5 a share for Inspire to expand its U.S. sales force to sell eye-disease products. The offer price represents a 26 percent premium to Inspire’s closing share price on April 4.
Inspire, based in Raleigh, North Carolina, makes Azasite, an antibiotic eye solution to fight bacterial infections. The company, which had $106 million in revenue last year, also receives royalties on sales of the prescription eye products Restasis and Elestat. The deal gives Merck a U.S. sales force for Saflutan, its glaucoma and ocular hypertension drug awaiting U.S. regulatory review.
The deal includes provisions that prevent Inspire from soliciting potential acquirers and gives Merck with four business days to match any competing proposal. Inspire would have to pay Merck a $17 million termination fee if it accepts a superior proposal, lawyers for Luttenberger said in the complaint.
Merck spokesman Ian McConnell declined to comment. Cara Amoroso, a spokeswoman for Inspire, didn’t immediately return a phone call seeking comment.
Luttenberger is seeking to represent all Inspire shareholders in his request for a court order barring the deal and unspecified damages.
The case is Luttenberger v. Inspire Pharmaceuticals Inc., CA6363, Delaware Chancery Court (Wilmington).
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