SAN DIEGO and NEW YORK, Feb. 18, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Forest Laboratories, Inc. (NYSE: FRX) by Actavis plc (NYSE: ACT). On February 18, 2014, the companies announced the signing of a definitive agreement pursuant to which Actavis will acquire all outstanding shares of Forest stock for $26.04 per share in cash and 0.3306 Actavis shares for each share of Forest common stock, a cash value of $89.48 per share.
Is the Proposed Merger Best for Forest and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at Forest is undertaking a fair process to obtain maximum value and adequately compensate Forest shareholders. As an initial matter, the $89.48 merger consideration represents a premium of only 25.3% based on Forest's closing price on February 14, 2014. That premium is substantially below the average one day premium of over 43% for comparable transactions in the past three years.In addition, on January 21, 2014, Forest released its financial results for the third quarter 2013, reporting an increase in revenues and net sales. Specifically, Forest reported a 24.9% increase in net sales to $846.8 million, from $678 million in the prior year quarter. The increase in net sales was driven by sales in the company's next generation products, which increased 59.4% compared to the third quarter of 2013. In addition, revenues for the nine months ended December 31, 2013 increased 12% to $2,554.6 million. Moreover, on February 3, 2014, Forest announced the completion of the acquisition of Aptalis which is expected to add approximately $700 million in revenue and about $0.78 per share to the company's non-GAAP EPS in the 2015 fiscal year. Given these facts, Robbins Arroyo LLP is examining the Forest board of directors' decision to sell the company to Actavis now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.