An investor in shares of Clinical Data, Inc. filed a lawsuit in State Court against members of board of directors of Clinical Data in effort to stop the takeover by Forest Laboratories, Inc.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties arising out of their attempt to sell Clinical Data too cheaply via an unfair process to Forest Laboratories, Inc.

On Tuesday, Feb. 22, 2011, Clinical Data, Inc. (NASDAQ: CLDA) and Forest Laboratories, Inc. (Forest) (NYSE: FRX) had announced that they have entered into a merger agreement pursuant to which Forest Laboratories, Inc will acquire Clinical Data Inc for $30.00 per share in cash plus contingent consideration of up to $6.00 per share that may be paid upon achievement of certain commercial milestones related to Clinical Data’s Viibryd™.

Clinical Data said the $30.00 per share represent a 6.6% premium to the volume-weighted average trading price of CLDA stock since the first trading day after the company announced the approval of Viibryd and that it was considering a potential change of control transaction and a 19.2% premium of the closing price on that day and totals $1.2 billion on a fully diluted basis, net of net cash acquired.

But the plaintiff alleges considering its prospects the bid grossly undervalues Clinical Data Inc. In fact CLDA shares traded as high as $33.90 per share as recently as Feb 18 and then declined in response to the takeover news to $30.96 per share, or 8.66%. Additionally at least one analyst set a price target of $46 per share of Clinical Data stock.

Furthermore, so the plaintiff, several provisions of the agreement, such as a no solicitation clause and a $45million termination fee provision prevent higher bids and shut out other bidders.