Royal DSM’s $1.1bn buy-out of Maryland-based DHA leader, Martek Biosciences Coropration, is being challenged in a Maryland Circuit Court.
Maryland class action specialist Brower Piven has lodged the suit on behalf of Martek shareholders which it alleges they have been the victim of an improper sale process, according to press reports.
While NutraIngredients-USA.com has not been able to obtain a copy of the suit, reports state Martek directors breached their fiduciary duties that led to a Martek shareholders receiving an unfair price for their shares.
It says the directors also agreed to, “certain onerous and preclusive deal protection provisions” that also ran contrary to shareholder interests.
The December transaction saw Martek’s board recommend its shareholders accept DSM’s $31.50 offer per share offer (via Greenback Acquisition Corporation, an indirect wholly-owned subsidiary) which added up to a 35 per cent premium for NASDAQ-listed Martek shareholders over the share price of $23.36 on December 21, 2010, when the offer was announced.
“The Martek board of directors has unanimously determined that, among other things, the offer is fair to and in the best interests of Martek's stockholders and unanimously recommends that Martek's stockholders accept the offer and tender their shares,” DSM said of the deal.
That figure represented a multiple of 8.5 EBITDA for the DHA (docosahexaenoic acid) infant formula specialist, a standard for such acquisitions, although DuPont’s $6.3bn acquisition offer of Danisco this month came in at 12.8 EBITDA.
DSM’s offer for Martek’s shares is due to expire on February 21.
Neither Martek nor DSM were able to be contacted at the time of publication.