Stryker (NYSE:SYK) yesterday filed to extend the anti-trust deadline on its $1.4 billion acquisition of K2M (NSDQ:KTWO) to give the U.S. Federal Trade Commission more time to examine the deal, as shareholders filed suit to block the merger, K2M said today.
The new FTC filing pushes the anti-monopoly waiting period out to Nov. 16, the Leesburg, Va.-based spinal implant maker said. And although a shareholder vote on the buyout is slated for Nov. 7, K2M revealed a pair of investor lawsuits filed in the U.S. District Court for Delaware seeking to challenge the deal.
The lawsuits argue that the company and its management failed to disclose financial projections developed by its advisor, Piper Jaffray, including how it calculated adjusted EBITDA, free cash flow and the reconciliation of reported metrics to adjusted metrics, according to court documents. One plaintiff also asked the Delaware court to expedite the case and grant a preliminary injunction barring consummation of the deal. Oral arguments on the motions are scheduled for Oct. 29.
K2M countered that the plaintiffs presented no sound evidence justifying a delay and said today that it intends to “vigorously defend” against the suits.
The deal calls for Kalamazoo, Mich.-based Stryker to pay $27.50 per share for each outstanding share of K2M, for a total of approximately $1.4 billion and a 27% premium over K2M’s average closing price during the 90 days of trading ended August 29. It’s slated to close during the fourth quarter.