Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of Prospect Medical Holdings, Inc. (“Prospect Medical” or the “Company”) (NASDAQ:
) concerning possible breaches of fiduciary duty and other violations of law related to the Company’s entry into an agreement to be acquired and taken private by Leonard Green & Partners, L.P. (“Leonard Green”) in a transaction with a value of approximately $363 million, including the assumption of approximately $158 million of net debt. Under the proposed agreement, Prospect Medical shareholders will receive $8.50 cash for each share of Prospect Medical common stock. In addition, some directors and officers of Prospect Medical that currently own in the aggregate approximately 10.4 million shares of Prospect Medical’s outstanding common stock (representing nearly 50% of Prospect Medical’s outstanding shares) have entered into a voting agreement in which they have agreed to vote all of their Prospect Medical shares in favor of the adoption of the merger agreement. These stockholders also have agreed to exchange approximately 6.2 million of their Prospect Medical shares for equity interests in the sponsored purchasing entity in lieu of their receipt of the cash merger consideration for those shares. Additionally, according to Thompson/First Call, at least one analyst has set a price target of $16.20 per share for Prospect Medical common stock.
Whether Prospect Medical’s Board of Directors breached their fiduciary duties to Prospect Medical’s stockholders by failing to conduct an adequate and fair sales process to sell the Company prior to agreeing to this proposed transaction, whether the proposed transaction undervalues Prospect Medical shares and by how much this proposed transaction undervalues the Company to the detriment of Prospect Medical shareholders are the key focus of this investigation.
Faruqi & Faruqi, LLP is a national law firm which represents investors and individuals in class action litigation. The firm is focused on providing exemplary legal services in complex litigation in the areas of securities, shareholder, antitrust and consumer litigation, through all phases of litigation. The firm has an experienced trial team which has achieved significant victories on behalf of the firm’s clients.