On Thursday, plaintiff Alex Ciccotelli filed a suit against Arena Pharmaceuticals, as well as various members of the company, alleging that the company had omitted material information on its proxy statement in connection to its entrance into a merger agreement with pharma giant Pfizer, a deal announced last month.
Arena Pharmaceuticals is a company that makes pharmaceutical supplies for the international market, the complaint says.
The complaint states that Arena Pharmaceuticals had filed a proxy statement with the Securities and Exchange Commission (SEC) that “omits material information with respect to the proposed transaction, which renders the proxy statement false and misleading.”
According to the merger agreement, Pfizer would buy each Arena common stock for $100 with a “total equity value of approximately $6.7 billion.”
The plaintiff claims that the proxy statement filed with the SEC omits important information regarding the company’s financial projections. According to the plaintiff, the information that is omitted are “all line items used to calculate the financial projections and a reconciliation of all non-GAAP to GAAP metrics.”
The proxy statement, according to the plaintiff “was prepared, reviewed and/or disseminated by the individual defendants. By virtue of their positions within the company, they were aware of this information and their duty to disclose this information
The plaintiff alleges that this information is crucial to shareholders to better understand the financial standing and performance of the company.
Other important information that the proxy statement allegedly omits includes “information regarding the analyses performed by the company’s financial advisors, Evercore Group LLC and Guggenheim Securities, LLC.”
The defendant faces two counts, one for violation of Section 14 (a) of the 1934 Exchange Act associated rules, as well as another count for violation of Section 20(a) of the same act.
The plaintiff is being represented by Rigrodsky Law, P.A.