Acquisition of Questcor Pharmaceuticals, Inc. by Mallinckrodt plc May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) by Mallinckrodt plc (NYSE: MNK). On April 7, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Questcor shareholders will receive $30.00 per share in cash and 0.897 Mallinckrodt shares for each for each share of Questcor common stock, for a total consideration of $86.10 per share.
Is the Proposed Acquisition Best for Questcor and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Questcor is undertaking a fair process to obtain maximum value and adequately compensate Questcor shareholders.
As an initial matter, the $86.08 merger consideration represents a premium of 27% based on Questcor’s closing price of $67.78 on April 4, 2014. This premium is significantly below the average one day premium of over 46% for comparable transactions in the last three years. Further, at least five analysts set a target price higher than the merger consideration including a target price of $99.00 set by an analyst at Oppenheimer & Co. on February 25, 2014 and a target price of $98.00 set by an analyst at Piper Jaffray on the same day.
In addition, on February 25, 2014, Questcor released its financial results for the fourth quarter and full year 2013, reporting strong increases in net sales and EPS. Specifically, Questcor reported net sales of $242.9 million for the quarter and $799 million for the fiscal year, an increase of 51% and 57% over the respective periods in 2012. In addition, the company reported a Non-GAAP Diluted EPS increase of 53% for the quarter compared to the same quarter 2012, and an increase of 65% year-over-year.
Given these facts, Robbins LLP is examining the Questcor board of directors’ decision to sell the company to Mallinckrodt. Questcor shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Questcor shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.