Kite Pharma, Gilead Sciences Face Securities Suit Over Potential Merger
by Erin Shaak
Last Updated on May 8, 2018
Axelrod v. Kite Pharma, Inc. et al.
Filed: September 11, 2017 ◆§ 2:17-cv-06684
A lawsuit has been filed against Kite Pharma, Inc., its board of directors, Gilead Sciences, Inc., and Dodge Merger Sub, Inc. alleging the defendants issued a misleading registration statement regarding a proposed merger between Kite and Gilead.
Kite Pharma, Inc. Gilead Sciences, Inc. Dodge Merger Sub, Inc.
California
A securities lawsuit has been filed against Kite Pharma, Inc., its board of directors, Gilead Sciences, Inc., and Dodge Merger Sub, Inc. alleging the defendants issued a misleading registration statement regarding a proposed merger between Kite and Gilead. The suit claims the registration statement, which proposes a transaction valued at approximately $11.9 billion, is allegedly missing information concerning the board’s possible conflicts of interest and certain details underlying the valuation analyses performed by Kite’s financial advisor, Centerview Partners LLC.
Specifically, the suit takes issue with the defendants’ apparent failure to disclose the timing of communications regarding Gilead’s decision to retain certain Kite executives.
“Any communications—even one-sided written indications in proposals or other written communications—concerning post-merger employment between Gilead or its affiliates and any Kite officers, directors, or employees, during the sales process, would be material to a stockholder’s decision as to whether to tender their shares,” the complaint alleges. “Such communications give rise to substantial undisclosed conflicts of interests.”
The suit further notes that although the registration statement does disclose some details of Centerview’s financial analyses, it is missing “key inputs and assumptions underlying these analyses.” The plaintiff claims that without this information, stockholders are unable to determine for themselves whether the deal is fair.
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