Aetna shareholders will be shortchanged if the company moves forward with a proposed $77 billion merger with CVS Health, according to a lawsuit filed Tuesday by an Aetna investor.
Here are seven things to know about the lawsuit.
1. CVS Health inked a definitive agreement in December 2017 to acquire all outstanding shares of Aetna for roughly $69 billion in cash and stock. When including the assumption of Aetna's debt, the transaction is valued at approximately $77 billion.
2. An Aetna shareholder filed a proposed class-action lawsuit against the company and several of its executives and board members Tuesday. The lawsuit alleges Aetna tried to convince its shareholders to vote in favor of the CVS Health transaction by filing a form containing "materially incomplete and misleading" information with the Securities and Exchange Commission on Jan. 4
3. The regulatory filing describes the various valuation analyses Lazard Frères & Co. used to determine whether the terms of the merger agreement are fair. However, according to the complaint, the description fails to include key inputs and assumptions underlying the analyses. "Without this information … Aetna's public stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Aetna's fairness opinion in determining whether to tender their shares in favor of the proposed transaction," states the complaint.
4. The regulatory filing also fails to provide line item projections for taxes, capital expenditures and other amounts used to calculate certain non-GAAP metrics, leaving Aetna shareholders without information necesary to make an informed decision regarding the fairness of the merger with CVS Health, according to the complaint.
5. The lawsuit further alleges the valuation analyses conducted by Lazard indicate Aetna stock has an inherent premium of about 113 percent over the price per share CVS Health has agreed to pay.
"The merger consideration in the proposed transaction is unfair and inadequate, because, among other things, the intrinsic value of the company and its common stock is materially in excess of the amount offered given the company's prospects for future growth and earnings," states the complaint. "As a result, the proposed transaction will deny class members their right to fully share equitably in the true value of the company."
6. The lawsuit seeks to block Aetna from holding the shareholder vote on the proposed transaction with CVS Health and taking any steps to complete the transaction until the company provides shareholders with the key information omitted from the regulatory filing.
7. Aetna declined to comment on the lawsuit. The company told Becker's Hospital Review it does not comment on pending litigation.
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