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Coventry Health Care, Inc. Investor Alert: Lawsuit filed to Block Takeover
A lawsuit was filed for current investors in shares of Coventry Health Care, Inc. in effort to block the proposed takeover and current NYSE-CVH stockholders should contact the Shareholders Foundation at firstname.lastname@example.org.
Investors who purchased shares of the Coventry Health Care, Inc. prior to August 20, 2012, and currently hold any of those NYSE-CVH shares have certain options and should contact the Shareholders Foundation at email@example.com or call +1(858) 779 - 1554.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE-CVH stockholders by agreeing to sell the company too cheaply to Aetna through an unfair process.
On August 20, 2012, Aetna and Coventry Health Care, Inc. announced that they have entered into an agreement pursuant to which Aetna will acquire Coventry Health Care, Inc. in a transaction valued at $7.3 billion, including the assumption of Coventry debt. Under the terms of the proposed transaction, Coventry Health Care, Inc. stockholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, or $42.08 per share, based on the closing price of Aetna common shares on Friday, August 17, 2012.
However, the plaintiff claims that the current offer undervalues the company and is fundamentally unfair to NSYE:CVH investors. Indeed, Coventry Health Care’s performance improved lately. In fact, its annual Revenue rose from over $11.58 billion in 2010 to over $12.18 billion in 2011 and its Net Income increased from $438.62 million in 2010 to $543.11 million in 2011. Its shares grew from as low as $8.36 per share in 2009 to as high as $37.48 per share in 2011.
Furthermore, so the plaintiff, the defendants agreed to preclusive deal protection devices, such as a restrictive no-shop and a hefty $167.5 million termination fee provision, that illegally restrain the Company's ability to solicit or engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company and operate conjunctively to make the proposed transaction a fait accompli, and all but ensure that the proposed transaction is successful and no competing offers will emerge for the company,
Those who are current investors in Coventry Health Care, Inc. and purchased their Coventry Health Care, Inc. shares prior to the announcement, have certain options and should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.