Shares of diagnostics and point of care solutions firm Alere (NYSE: ALR) fell 4 percent near the close of day, on Friday, after the Waltham, MA-based company issued a new statement indicating their plans to sue the company it had previously slated to merge with.
That company is Abbott Laboratories. Abbott (NYSE: ABT) has, apparently, been slow to close its purchase of Alere, perhaps in an attempt to sever the deal. Indeed, they had offered Abbott $50 million to dissolve the relationships, in April, but Alere turned it down and is now suing the medical device maker in what appears to be an attempt to force the completion of this transaction.
Indeed, Alere has filed a Delaware Chancery Court complaint which seeks to “compel Abbott to fulfill its obligations under the terms of the merger agreement to take all actions necessary to promptly obtain all required anti-trust approvals,” as described by the company in a statement made to shareholders, Friday.
In the statement, Alere said, “Alere will take all actions necessary to protect the interests of Alere shareholders, enforce Alere’s rights under the merger agreement and compel Abbott to complete the transaction in accordance with its terms.”
Originally, the pair had announced the $5.8 billion acquisition in March, but Abbott soon after moved to terminate the freshly minted deal. At the time, the expressed concern over the possibility of a foreign corruption investigation into Alere’s past and present international business practices. Basically, if they do not succeed in cancelling the deal, Abbott could absorb the liability associated with Alere’s alleged misconduct.
Now, in June, Alere expressed confidence that the deal would succeed, even as Abbott had simultaneously shared “serious concerns” over the accuracy of Alere’s financial information.
Reportedly, Abbott had offered Alere a consolation payment to get out of the deal, but Alere turned it down. Thus, in April, Abbott CEO Miles White would not comment on the potential acquisition, responding only with “We don’t know when they’ll file their proxy. We don’t know when they’re going to have a shareholder vote. So right now I’d say it’s not appropriate for me to comment on Alere.”
Accordingly, Alere has said they expect to release a redacted version of the complaint, to the public, at some point next week.