MEDTOX Scientific, Inc. (NASDAQ:MTOX) Investor Files Lawsuit Against Directors Over Alleged Breaches Of Fiduciary Duties In Connection With The Proposed Merger with LabCorp
June 15, 2012 (Shareholders Foundation) -- An investor in NASDAQ:MTOX shares filed a lawsuit against directors of MEDTOX Scientific, Inc. in effort to stop the proposed takeover of MEDTOX Scientific, Inc.by Laboratory Corporation of America Holdings at $27.00 per NASDAQ:MTOX share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:MTOX investors arising out of the attempt to sell Medtox Scientific, Inc. too cheaply via an unfair process to LabCorp.
On June 4, 2012, MEDTOX Scientific, Inc. (Nasdaq:MTOX) announced that it had entered into a merger agreement with Laboratory Corporation of America® Holdings (NYSE:LH). Under the terms of the proposed transaction, Laboratory Corporation of America® Holdings would acquire MEDTOX Scientific, Inc. for a purchase price of $27.00 per share in cash, representing a total enterprise value of approximately $241million.
However, the plaintiff claims that the $27offer is unfair to NASDAQ:MTOX investors and undervalues the company given its strong growth over the last year. In fact, MEDTOX Scientific financial performance improved over the past recent years. MEDTOX Scientific’s annual Revenue rose from $85.81million in 2008 to $108.15million in 2011.
Furthermore, the plaintiff alleges that “there is no evidence that the company was 'shopped' to other potential buyers, either strategic or financial, before agreeing to the proposed transaction."