Javelin Commences Litigation Against Hospira And Discus Acquisition Corporation, Asserts Hospira Is In Breach Of Merger Agreement And Specific Performance Provision Compels Completion Of Merger
Javelin Pharmaceuticals, Inc. (NYSE -- Amex: JAV) ("Javelin") today announced that it has filed a lawsuit against Hospira, Inc. ("Hospira") and Discus Acquisition Corporation, a wholly owned subsidiary of Hospira formed to acquire Javelin ("Discus"). The complaint, filed in the Delaware Court of Chancery by Javelin, seeks to compel Hospira and Discus to complete the agreed-upon merger pursuant to the definitive merger agreement among Javelin, Hospira and Discus dated April 17, 2010. Javelin also has filed a motion seeking expedited proceedings in Delaware court to allow for an early trial at which it will seek an order requiring Hospira to fulfill its obligations under the merger agreement and under the loan agreement dated April 17, 2010 among Javelin, Hospira and Innovative Drug Delivery Systems, Inc., a wholly-owned subsidiary of Javelin.
On May 19, 2010, Hospira announced that Discus was extending the tender offer to purchase all outstanding shares of the common stock of Javelin to 12:00 midnight, New York City time, on June 2, 2010. Hospira announced that the extension of the offering period under the merger agreement was based on certain of the conditions to Discus’s obligation to accept and pay for shares tendered through May 18, 2010, which represented 78.82% of the shares of common stock of Javelin outstanding, not being fully satisfied prior to the expiration of the initial offering period of the tender offer. Javelin asserts in the complaint that all of the conditions of the tender offer were satisfied immediately prior to the expiration of the initial offering period and continue to be satisfied. Neither Hospira nor Discus has identified the condition or conditions to completion of the tender offer that Javelin has failed to satisfy.
The complaint contends that Hospira and Discus have breached the merger agreement by failing to accept and pay for shares tendered through May 18, 2010 and by failing to complete the merger transaction. The complaint further asserts that Hospira breached the terms of a loan agreement pursuant to which Hospira was obligated to provide to Javelin an additional loan of $2 million on June 1, 2010.
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