Raptor Pharmaceutical Corp. (NASDAQ:RPTP) Investor Lawsuit Agaisnt Acquisition By Horizon Pharma plc Filed

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Company Name(s): 
Raptor Pharmaceutical
Case Name: 
Raptor Pharmaceutical Deal Case 10/12/2016
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

October 12, 2016 (Shareholders Foundation) - An investor who currently holds shares of Raptor Pharmaceutical Corp. (NASDAQ:RPTP), filed a lawsuit in effort to halt the proposed takeover of Raptor Pharmaceutical Corp. by Horizon Pharma plc for $9.00 per share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:RPTP stockholders by agreeing to sell Raptor Pharmaceutical Corp. too cheaply via an unfair process to Horizon Pharma plc.

On September 12, 2016, Horizon Pharma plc (NASDAQ:HZNP) and Raptor Pharmaceutical Corp. (NASDAQ:RPTP) announced the companies have entered into an agreement under which Horizon Pharma will acquire all of the issued and outstanding shares of Raptor Pharmaceutical Corp. (NASDAQ:RPTP) common stock for $9.00 per share in cash, for an implied fully diluted equity value of approximately $800 million.

However, plaintiff claims that the proposed consideration NASDAQ:RPTP shareholders will receive is grossly inadequate and undervalues Raptor Pharmaceutical Corp. Indeed, at least one analyst has set the high target price for NASDAQ:RPTP shares at $11.00 per share and NASDAQ:RPTP shares reached as high as $16.00 per share in June 2015. In addition, the plaintiff alleges that the process is also unfair to NASDAQ:RPTP stockholder. The plaintiff claims that the takeover agreement contains preclusive deal protection devices, such as a strict no solicitation, last look, and a $30 million termination fee provision, that deter other bidders from making a superior offer for Raptor Pharmaceutical Corp.