An investor has filed a lawsuit in California State Court challenging Varian's proposed $1.5 billion sale to Agilent Technologies.
Under the terms of the proposed acquisition announced last week, Agilent will pay $52 for each share of Varian stock, a 35 percent premium over the closing price of Varian's stock on the trading day before the proposal was announced [see PM 07/30/09].
In a statement, New York law firm Levi & Korsinksy said that "the transaction appears unfair given that Varian shares traded close to $70 per share in 2008." That figure was reached on Jan. 17, 2008, when Varian shares hit a high of $68.69. Like other publicly traded firms, though, Varian's stock has taken a hit since then, as the riptide created by the broad Wall Street upheaval over the last year pulled the market down. At the close of market on Wednesday, Varian shares were priced at $50.77.
It is unclear whether Levi & Korsinsky filed the lawsuit but it is seeking parties who may be interested in becoming plaintiffs in the case. On deadline representatives from the firm were not available for comment.
In its statement, Levi & Korsinsky also took issue with a no-solicitation provision that the Varian board agreed to and a $46 million termination fee. Together, the two conditions "all but ensure that no superior offer will ever be forthcoming."
The deal is expected to close before the end of the year.
Other law firms are questioning the proposed deal. This week, Atlanta-based Holzer Holzer & Fistel and Bethlehem, Penn., firm Howard G. Smith also said they are investigating whether Varian's board fulfilled its fiduciary duties in approving the transaction.
Spokespeople for Varian and Agilent said the companies had no comment.