Obagi Medical Products Inc., which makes prescription-strength skin care systems, was sued by an investor seeking to block a $360 million acquisition by Valeant Pharmaceuticals International Inc.
The offer undervalues Obagi, Michael Rubin, the shareholder, said in a filing made public today in Delaware Chancery Court. Rubin seeks to represent all Obagi shareholders in his request for a court order barring the deal.
Obagi announced March 20 that its directors unanimously approved Montreal-based Valeant’s purchase of the company for $19.75 a share in cash. The transaction is expected to close in the second quarter, the companies said in a statement.
Rubin accused Obagi’s board of breach of fiduciary duties, alleging the purchase price was inadequate given the company’s “excellent” prospects for growth, according to the complaint. Deal-protection clauses within the agreement, including a $16.2 million termination fee, preclude other bidders from making a successful competing offer, Rubin said in the complaint.
Mark Taylor, a spokesman for Long Beach, California-based Obagi, didn’t immediately return a phone call seeking comment on the complaint.
The case is Rubin v. Obaji Medical Products Inc., CA8433, Delaware Chancery Court (Wilmington).