A New York Investment Fund has made an unsolicited bid to acquire Cambridge-based AMAG Pharmaceuticals, the Boston Business Journal reports.
AMAG’s board of directors said it would evaluate the offer and make a recommendation to shareholders. MSMB Capital Management, a New York fund that invests in health care and biotechnology, made the $378 million bid to block the proposed merger of AMAG and Allos Therapeutics.
When it comes to mergers and acquisitions in Massachusetts, the actions of boards of directors will be scrutinized. A board’s responsibilities when it comes to planning and corporate finance are to act in the best interest of the company and its shareholders.
Our General Counsel on Call service provides legal advice to corporations in Massachusetts. Properly fulfilling the duties of the board can be particularly complicated during a merger or acquisition or when dealing with possible issues of employment discrimination, liabilities or financial issues governed by Sarbanes Oxley.
The deal between Allos and AMAG is worth $686 million and would give Allos about 40 percent of the new joint venture. AMAG Pharmaceuticals is focused on the development of therapeutic iron to treat iron deficiency anemia. Allos Therapeutics is focused on anti-cancer therapeutics. The merger was announced in July. “We are very excited about this merger as it creates a combined company with an enhanced commercial presence in attractive market segments supported by a more efficient organizational structure,” said Brian J.G. Pereira, CEO of AMAG.
MSMB Capital Management is a long-term shareholder of AMAG and said it does not believe shareholders would be best served by the merger.
The Boston Business Journal has since reported that AMAG’s board has rejected the “white knight” bid and reaffirmed its intentions to merge with Allos. The journal also reports that AMAG has come under some pressure this year after reporting lower-than-expected sales of its anemia drug.
The board announced that the “previously disclosed proposal by MSMB Capital is not reasonably expected to result in a superior offer to the merger with Allos Therapeutics, Inc.”
When boards often run into problems is when it’s revealed that board members stand to profit substantially from one course of action. Conflicts of interest and other legal issues must be thoroughly explored and resolved — to protect both the merger and the integrity of all involved.
A Boston business law and employment law firm, The Brown Law Firm, LLC, has offices in Belmont and Boston. The firm both advises corporations and sits on the Board of at least one company. For a free and confidential consultation, call 617-489-0817 or contact us through this website.
AMAG investor launches takeover bid to halt merger, by Julie M. Donnelly, Boston Business Journal.