Shareholders seek to block ev3 sale

ev3 (NASDAQ:EVVV) and its directors are facing several shareholder lawsuits designed to block the sale of the company to Covidien (NYSE:COV). The companies announced earlier this month that Covidien was acquiring ev3 for $2.6 billion, or $22.50 a share.

In an SEC filing, ev3 reports that Joanne Olson has filed a purported class action complaint in the Court of Chancery of the State of Delaware June 18. The complaint maintains that the members of the board breached their fiduciary duties to stockholders both in entering into the merger agreement. In addition, the agreement gives Covidien the irrevocable top-up option "to purchase a sufficient number of common shares that, when added to the shares purchased in the Tender Offer, will give [Covidien] more than 90 [percent] of the [c]ompany's outstanding common stock," the plaintiff maintains in her suit.

The suit also alleges that the top-up option and promissory note are a sham "designed only to (i) avoid the procedural protections afforded to stockholders of controlled companies, (ii) escape entire fairness review and (iii) facilitate the short-form cash-out Merger that otherwise would be unavailable." She is seeking, among other things, an injunction prohibiting the consummation of the offer.

Two other suits have been filed in Minnesota by Alan Bergland and Kevin Keilty, also accusing the ev3 directors of breaching their fiduciary duty.

Covidien is also facing potential legal action related to its proposed acquisition of Michigan's Somanetics (NASDAQ: SMTS). After the news broke, Levi & Korsinsky, a law firm, said it was investigating the Somanetics board for a possible breach of fiduciary duty and various state laws. But Bill Iacona, Somanetics' CFO, has said that the proposed sale of the company will be good for shareholders, Crain's Business Detroit reports.

- see the law firm's release
- check out the Olson complaint
- see the Keilty and Bergland complaints
- read the Reuters story
- get more from Crain's

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