After NovaMed, Inc. announced that its board of directors agreed to a takeover of Nova Med by People's Surgery Center Holdings, Inc. an investigation for investors in NovaMed, Inc. (NASDAQ:NOVA) questioning whether the offer and the sale process are unfair to NOVA investors was announced.

The investigation by a law firm concerns whether certain officers and directors at NovaMed, Inc. breached their fiduciary duty owed to the shareholders of NovaMed, Inc. (NASDAQ:NOVA) arising out of their attempt to sell NovaMed to Surgery Center Holdings, Inc.

On Friday, Jan. 21, 2011, NovaMed, Inc. (NASDAQ:NOVA)announced that it has entered into a merger agreement to be acquired by an affiliate of Surgery Center Holdings, Inc. in a transaction valued at approximately $214 million, including the assumption or repayment of approximately $105 million of indebtedness. Surgery Partners is an affiliate of private equity investment firm H.I.G. Capital, LLC. Under the terms of the merger agreement, NovaMed, Inc. stockholders would receive $13.25 per NOVA share in cash. NovaMed said the offer represents a premium of 54.6% over the closing price of NovaMed's common stock as of the time of Surgery Partners' initial offer on August 2, 2010; a 17.7% premium over the Company's 90 day average closing price; and a 10.7% premium over the Company's 30 day average closing price.

But shares of NovaMed, Inc. traded in open market on Thursday as low as $12.72 and as high as $13.05 per share leaving NOVA investors with only a meager premium and even increased in response to the takeover news above to current offer to $13.31 per share during Fridays trading. Thus NOVA investors would exchange their shares at a discount and could have sold their shares in the open market at an offer exceeding price. In addition at least one analyst has set an $18.00 per share price target for NovaMed stock and NOVA shares traded during 2009 as high as $14.61 and on June 1 2010 had a split 1:3. During 2006 NOVA shares reached its 10year high over $25.71 per share. Additionally NovaMed has performed well for its shareholders in the past. NovaMeds 12 months Total Revenue went from $104.26million in 2006 to $156.44million in 2009. Its Net Income went from $5.54million in 2006 to $7.51million in 2009. For the first three quarters in 2010 NovaMed, Inc. reported a combined nine months Total Revenue of $133.17million with a combined nine months Net Income of $5.15million. Further certain NovaMed directors and officers that in the aggregate own approximately 10.5% of NovaMed's outstanding shares have already entered into agreements with Surgery Partners to vote in favor of the merger.

Therefore the investigation seeks to determine whether NovaMed, Inc. and certain of its officers and directors breached their fiduciary duties owed to NovaMed, Inc. (NASDAQ:NOVA) investors by rushing into the transaction and failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of NovaMed (NASDAQ:NOVA), specifically by entering into any transaction before adequately shop the Company. A potential class action lawsuit would seek to maximize the amount of money and information NOVA shareholders would receive in a buyout, so the law firm.