PRA Health Sciences Sued over Merger with ICON

Michael Birdsall filed suit against PRA Health Sciences, Inc. and its Board of Directors over claims that the company had provided misleading information to its shareholders regarding their merger with Ireland-based pharmaceutical company ICON on Tuesday. 

Specifically, Birdsall argued the leading global contract research organization and its Board of Directors are violating the Securities Exchange Act of 1934 and the United State Securities and Exchange Commission Rule by authorizing “the filing of a materially incomplete and misleading Definitive Proxy Statement with the (U.S. Securities and Exchange Commission).”

PRA’s merger with ICON will result in ICON being the surviving company. Upon approval of the merger, PRA shareholders are set to receive $80 in cash and 0.4125 shares of ICON stock for each share of PRA stock they have. This sets the comprehensive value of the PRA stock at about $166.06 as of the day before the merger was announced. When providing this information to their shareholders, the plaintiff claimed the goal of the PRA Board of Directors was to mislead shareholders in order to convince them to approve the transaction.

Birdsall asserted that the proxy contained misleading information in regard to both the background of the proposed transaction and the valuation analyses performed by PRA’s financial advisors, BofA Securities, Inc. and USB Securities LLC. 

Due to the recent success of PRA, the plaintiff argued that “the proposed transaction comes at a time when PRA’s future success was not fully reflected by its share price,” adding that the intrinsic share value is probably higher than the value reflected in the proposed transaction. Further, the plaintiff described that the terms of the merger will limit PRA shareholders from having a significant stake in the new company.

Based on claims that PRA’s Board of directors was not acting in good faith or with its shareholders in mind when negotiating the terms of the merger, Birdsall is seeking “injunctive and other equitable relief to prevent the irreparable injury that the Company’s shareholders will continue to suffer absent judicial intervention.” 

The plaintiff asserted that the proposed transaction background, information, and valuation analyses need to be corrected and amended before the PRA shareholders vote on the merger on June 15. This lawsuit is an effort to prevent the defendants from furthering the transaction while appropriate information remains unavailable to PRA stockholders.Michael Birdsall is represented by Monteverde & Associates PC.