Stockholder Takes Issue with PharMerica Merger in Securities Suit

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PharMerica Corporation, its board of directors, Kohlberg Kravis Roberts & Co. L.P. (KKR), and Walgreens Boots Alliance, Inc. (WBA) are facing a securities lawsuit that claims the defendants filed a misleading proxy statement in connection with a merger between PharMerica, KKR, and WBA.

According to the suit, the proxy failed to disclose to stockholders that the financial projections used to determine PharMerica’s value “were materially incomplete” and didn’t account for the company’s acquisitions business.

Further, the case takes issue with the “deficient and conflicted” sales process leading up to the transaction, claiming that stockholders should have been made aware of potential conflicts of interest among the company’s board of directors and its financial advisor. Specifically, the complaint alleges that these parties were incentivized to recommend the merger, noting that the board was promised future employment with the company and their financial advisor would be building on a prosperous business relationship with KKR and WBA, which had allegedly been well-established before merger discussions even began.

The plaintiff argues that the allegedly misleading proxy caused stockholders to be tricked into supporting the proposed merger and robbed of the full value of their shares.