Covidien (NYSE:COV) said last week that it inked a deal that would settle a consolidated derivatives lawsuit filed by shareholders seeking to block the medical device company’s pending merger with Medtronic (NYSE:MDT).
The case is the consolidation of a trio of derivatives lawsuits dating back to July, the month after news broke of the blockbuster $43 billion mega-deal. Mansfield, Mass.-based Covidien said Dec. 23 that it inked a memorandum of understanding to settle the case with the plaintiffs.
The lawsuits, the 1st of which was filed July 10 in the U.S. District Court for Massachusetts, accuse Covidien, its board of directors and chairman, president & CEO José Almeida of breaching their fiduciary duties in agreeing to the acquisition, which values COV shares at $93.22 apiece.
"In connection with the settlement contemplated by the memorandum of understanding, Covidien agreed to make certain additional disclosures related to the proposed transaction with Medtronic," Covidien said in a regulatory filing. "The memorandum of understanding contemplates that the parties will enter into a stipulation of settlement.”
The companies have cleared a series of legal and regulatory hurdles as the Jan. 6 date for shareholder approval votes draws near. Last week a Minnesota federal judge declined to stop its plan to cover a $63 million tax tab stemming for its top executives and directors. Anti-trust regulators worldwide have approved the merger, contingent on the consummation of a deal with Spectranetics (NSDQ:SPNC), which agreed in November to pay $30 million for Covidien’s Stellarex drug-eluting balloon assets.