Endovascular devices maker ev3 Inc (EVVV: 22.49 +0.01 +0.04%) has agreed with the plaintiffs to settle the shareholder class action lawsuit related to the company’s impending acquisition by Dublin-based healthcare product makerCovidien plc (COV: 40.88 +0.10 +0.25%).ev3 is expected to be acquired by Covidien by end-July 2010 under a deal (signed on June 1, 2010) worth $2.6 billion. The merged entity is expected to become a leading endovascular player with strong positions in both the peripheral vascular and neurovascular markets.
Covidien made a tender offer on June 11, 2010, to acquire all the outstanding shares of eV3 for $22.50 each in cash. Unless extended, the offer is slated to expire on Friday, July 9, 2010. The board of directors of eV3 has unanimously recommended the acceptance of the offer to the company’s shareholders.
An eV3 shareholder filed a class action suit on behalf of other stockholders in the Delaware Chancery Court on June 22, 2010, in an attempt to block the acquisition. The plaintiff accused the board of directors of eV3 of infringing their fiduciary duties by entering into the merger agreement, allowing a controlling shareholder of the company to divest its stake.
The petitioner also claimed a provision of the merger agreement that allows ev3 to issue additional shares is void under Delaware law. Moreover, it asserted that the deal is forcing eV3 shareholders to tender their shares for reasons other than the financial merits of the tender offer.
The settlement, which is subject to the approval of the Delware court, calls for eV3 to make supplemental disclosures and certain amendments to its merger deal with Covidien.
ev3 focuses on catheter-based or endovascular technologies for the treatment of vascular diseases and disorders. The company develops and markets an extensive variety of products including stents, embolic protection devices, thrombectomy devices and balloon angioplasty catheters. ev3 competes with larger players such as Boston Scientific (BSX: 6.43 +0.05 +0.78%), Medtronic (MDT: 37.145+0.155 +0.42%) and C.R. Bard (BCR: 79.13 +0.25 +0.32%) in the endovascular space.
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