Late last week, a shareholder sued Magellan Health Inc. and its board of directors for their alleged collective failure to make the requisite disclosures in connection with Centene Corporation and Mayflower Merger Sub Inc.’s (together, Centene) proposed acquisition of Magellan for $2.2 billion. The healthcare merger has been the subject of several lawsuits since its announcement at the beginning of the year.
The other cases lodged against Magellan have been brought in the District of Delaware, where the company is incorporated, as Law Street Media previously reported. The latest case, filed in the Eastern District of Pennsylvania, explains that Magellan “manages the fastest growing, most complex areas of health, including special populations, complete pharmacy benefits, and other specialty areas of healthcare.”
As a result of the transaction, Centene will purportedly establish “one of the nation’s largest behavioral health platforms across 41 million unique members with enhanced capabilities to deliver better health outcomes for complex, high-cost populations.” Under the proposed agreement, Magellan’s stockholders are set to receive $95 per share.
The complaint takes issue with several aspects of Magellan’s proxy statement. In particular, the shareholder contends that the financial analyses, projections, and background of the proposed merger and potential conflicts of interest lack transparency. Allegedly, Magellan’s financial advisors, Goldman Sachs & Co. LLC and Guggenheim Securities LLC, failed to adequately explain or disclose how they arrived at certain conclusions based on their analyses, leaving shareholders unable to assess the fairness of the transaction.
The filing asks the court to enjoin the defendants from consummating the proposed merger, or in the event that they do so, rescinding it. It also asks the court to compel Magellan to create and publicize a proxy statement that cures the aforementioned defects, and award the plaintiff his attorneys’ fees and costs, among other requests.
The plaintiff is represented by Grabar Law Office.
