A unit of Blackstone Group LP, seeking to acquire Emdeon Inc. in a $3 billion buyout, was sued by a shareholder of the software maker claiming the offer undervalues the company.
John Kowalczyk, an Emdeon investor, sued the Nashville, Tennessee-based company and Blackstone, arguing that the proposed transaction shortchanges shareholders, in a lawsuit filed today in Delaware Chancery Court. Kowalczyk seeks to represent outside shareholders as a group.
“The timing of the proposed transaction has been engineered to take advantage of a recent decline in the trading price of Emdeon’s shares,” and will result in shareholders being cashed out “below the company’s true value.”
Amanda Woodhead, a spokeswoman for Emdeon, and Peter Rose, a Blackstone spokesman, didn’t immediately return phone calls and e-mails seeking comment.
New York-based Blackstone, the world’s biggest private-equity firm, announced it would take the provider of health-care payment solutions private for about $3 billion, in an Aug. 4 statement. The company would pay Emdeon investors $19 a share, a 17 percent premium to the stock’s previous close of $16.25 on Aug. 3.
“The offer price reflects an inadequate premium to the trading price,” Kowalczyk contends in the lawsuit.
The software maker’s biggest shareholders, private-equity firms Hellman & Friedman LLC and General Atlantic LLC, which own about 70 percent combined, support the sale, court papers show. Hellman & Friedman, based in San Francisco, will maintain a “significant minority equity interest” in the company, according to the statement.
The shareholder claims that the sale is unfairly structured to “deter alternative bids.” The deal contains a non-solicitation clause that prevents board members from seeking other offers and gives Blackstone the power “to learn of any alternative bid and match it.”
The case is Kowalczyk v. Black, CA6773, Delaware Chancery Court (Wilmington).