- Judge stays ruling until Sept. 8, orders mediation first
- Alere says Abbott is stalling to avoid going through with deal
A Delaware judge promised Alere Inc. a quick resolution to a lawsuit over its stalled $5.8 billion purchase by Abbott Laboratories, but only if the companies can’t settle the squabble in mediation first.
Delaware Chancery Court Judge Sam Glasscock said at a hearing Friday that he would put the case on the court’s fast track. Glasscock didn’t rule on Alere’s request for a trial later this month and instead ordered both sides to try to reach an agreement by Sept. 8.
Alere accused Abbott in the lawsuit of trying to back out of the deal by dragging its heels with regulators and threatening to bury the medical diagnostic company in paperwork, making its life a “living hell.”
Abbott is seeking to ”run out the clock on the merger,” said Bruce Birenboim, one of Alere’s lawyers. The deadline to close the deal is April 30, 2017.
Abbott accused Alere in court papers of withholding information about federal probes and coaching witnesses to lie about its Indian operations. James Hurst, one of Abbott’s lawyers, told Glasscock on Friday that the company is following established procedures for securing regulatory blessing of the deal. Alere has slowed the process by delaying release of its financial results, Hurst said.
Scott Stoffel, an Abbott spokesman, called the judge’s suggestion of working together “helpful.” Alere officials welcomed the decision but declined further comment.
The proposed purchase, signed Jan. 30, ran into trouble after Alere delayed filing documents about its 2015 financial performance with securities regulators. The company has since disclosed two U.S. probes into some of its businesses overseas and its billing practices in the U.S.
Alere contends Abbott officials got cold feet about the takeover after agreeing to buy medical-device maker St. Jude Medical Inc. for $25 billion in April. Closing both deals will stretch Abbott’s financial limits, forcing the health-care company to issue more equity and triple “its debt load, which will likely lower its credit rating,” Alere said in its complaint made public Wednesday.
“Abbott will have no trouble” winning antitrust approval by the deadline, Hurst said.
The case is Alere Inc. v. Abbott Laboratories, CA 12691, Delaware Chancery Court (Wilmington).