February 21, 2014 (Shareholders Foundation) - An investor who currently holds shares of Forest Laboratories, Inc. (NYSE:FRX) filed a lawsuit in effort to halt the proposed takeover of Forest Laboratories, Inc. by Actavis plc for a value of approximately $89.48 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:FRX stockholders arising out of the attempt to sell Forest Laboratories, Inc. too cheaply via an unfair process to Actavis plc.

On February 18, 2014 Actavis plc (NYSE:ACT) and Forest Laboratories, Inc. (NYSE:FRX) announced that they have entered into an agreement under which Actavis will acquire Forest Laboratories, Inc. for a combination of cash and equity valued at approximately $25 billion or $89.48 per Forest share ($26.04 in cash and 0.3306 Actavis shares for each share of Forest common stock).

However, the plaintiff alleges that the offer is too low and undervalues Forest Laboratories, Inc. Indeed, at least one analyst has set the high target price for NYSE:FRX shares at $91.00 per share. Furthermore, Forest Laboratories, Inc.’s performance improved lately. For instance, shares of Forest Laboratories, Inc. (NYSE:FRX) rose from $19.12 per share in March 2009 to as high as $69.97 per share in January 2014. The plaintiff claims that the intrinsic value of the company’s common stock is materially in excess of the amount offered given the company’s prospects for future growth and earnings of Forest Laboratories, Inc.

In addition, the plaintiff claims that the process is also unfair to NYSE:FRX stockholders. The plaintiff says that the defendants further exacerbated their breaches of fiduciary duty by agreeing to lock up the Proposed Transaction with deal protection devices, such as a no solicitation, a matching rights, and a $875 million termination fee provision, that discourage other bidders from submitting a superior bid for the Company

On February 21, 2014, NYSE:FRX shares closed at $96.88 per share.