San Diego, Oct. 14, 2011 (Shareholders Foundation) -- An investor in Pharmaceutical Product Development, Inc. (NASDAQ: PPDI) filed a lawsuit against directors of Pharmaceutical Product Development in effort to block the takeover attempt of Pharmaceutical Product Development by affiliates of The Carlyle Group and Hellman & Friedman for $33.25 per PPDI share.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed Pharmaceutical Product Development (PPDI) investors arising out of the attempt to sell Pharmaceutical Product Development too cheaply via an unfair process.

On October 3, 2011, Pharmaceutical Product Development, Inc. (Nasdaq: PPDI) announced that it has entered into a merger agreement under which it will be acquired by affiliates of The Carlyle Group and Hellman & Friedman in an all-cash transaction valued at $3.9 billion, after which Pharmaceutical Product Development will be a private company. Under the terms of the proposed buyout, The Carlyle Group and Hellman & Friedman will acquire the outstanding common shares of Pharmaceutical Product Development for $33.25 per PPDI share in cash. Pharmaceutical Product Development said the offer represents a premium of 29.6 percent over PPD's closing price on September 30, 2011.

Following the takeover news PPDI shares jumped on Monday, October 3, 2011 to $32.26 per share.

However, the plaintiff claims the $33.25 per share offer undervalues Pharmaceutical Product Development and the proposed transaction is designed to benefit Pharmaceutical Product Development 's insiders at the expense of shareholders.

In fact, at least one analyst has set the high target price for PPDI shares at $38 per share. Additionally Pharmaceutical Product Development’s financial performance over the past four years has been consistent. Pharmaceutical Product Development’s annual Revenue ranged over the past four annual filing periods between $1.39billion and $1.55billion with an annual Net Income ranging from $127.70million to $187.95million. Its second quarter financial results in 2011 improved compared to one year earlier. Pharmaceutical Product Development reported a second quarter 2011 Revenue of $407.70million compared $369.92million for the second quarter in 2010 and its second quarter Net Income rose from $20.98million last year to $46.51million this year.

Shares of Pharmaceutical Product Development, Inc. (Public, NASDAQ:PPDI) grew from as low as $19.37 in May 2009 to as high as $31.15 as recently as September 2, 2011.

Furthermore, so the plaintiff, the proposed transaction will especially enrich certain insiders and that certain of the defendants, such as Pharmaceutical Product Development’s new CEO, who allegedly stands to make $8 million for 2 1/2 weeks' employment”, will receive lavish compensation, benefits or change-of-control and severance benefits, posing a conflict in protecting shareholder interests.