NEW YORK (GenomeWeb News) – Gen-Probe has agreed to settle litigation in connection with its $3.7 billion purchase by Hologic, the San Diego-based molecular diagnostics firm disclosed in a document filed with the US Securities and Exchange Commission today.
Separately, Hologic announced the pricing of its private placement of $1 billion of senior notes and the expected pricing of loans in connection to the deal.
In its SEC document, Gen-Probe said it has entered into a memorandum of understanding to settle a lawsuit that was filed against it, its directors, and Hologic shortly after the pending acquisition was announced in late April. In two separate lawsuits filed with the Court of Chancery in the State of Delaware — Timothy Coyne v. Gen-Probe, et al, and Douglas R. Klein v. John W. Brown, et al — plaintiffs alleged Gen-Probe's directors breached certain fiduciary duties to the company's shareholders by approving the Hologic deal. Brown is a member of Gen-Probe's board.
The lawsuits, which were consolidated and certified into a class action in May, sought an injunction against the deal and damages in the event the acquisition was completed.
Gen-Probe entered the MOU to settle the dispute on July 18, it said. The settlement, which needs approval by the Delaware court, is also conditioned on the execution of an appropriate stipulation of settlement and completion of the acquisition.
A settlement would not affect the terms of the deal, under which Hologic would pay $82.75 for each share of Gen-Probe's common stock, Gen-probe said.
Another lawsuit was filed in the Superior Court of the State of California, San Diego County also alleging the breach of fiduciary duties by Gen-Probe's board of directors. The company has made no announcements about that case, Teamsters Local Union No. 727 Pension Fund v. Gen-Probe, et al. A company spokesman today declined to comment on the litigation.
Gen-Probe has scheduled a special shareholders meeting on July 31 for a vote on the deal, which is expected to close on Aug. 1
Also, Hologic today said that the private placement of 6.25 percent senior notes, due in 2020, are expected to close concurrent with the completion of its acquisition of Gen-Probe. Hologic said last week it had begun the marketing for $750 million aggregate principal amount of the notes.
Separately, Hologic said that it has received expected pricing on its $2.80 billion of senior secured credit facilities it expects to establish to pay for the Gen-Probe deal. The facilities are expected to comprise of a $300 million credit facility initially at LIBOR plus 3 percent due 2017; a $1 billion tranche A term loan initially at LIBOR plus 3 percent due 2017; and a $1.50 billion tranche B term initially at LIBOR plus 3.5 percent loan due 2019.