Thursday, November 6, 2008

TKT investors to get $568M from Shire lawsuit

By Mass High Tech Staff

Pharmaceuticals company Shire plc announced on Wednesday it will pay more than a half billion dollars to settle a lawsuit stemming from its buyout of Cambridge-based Transkaryotic Therapies Inc. (TKT).

Ireland-based Shire (Nasdaq: SHPGY) purchased TKT, a biopharmaceutical company that specializes in treatments for diseases caused by protein deficiencies, for $1.6 billion in 2005.  Although the deal closed, it was nearly blocked by investor resistance. Several of the company’s institutional investors had doubts that the asking price for TKT was high enough.

These investors, who collectively held about 11.3 million shares, declined to accept Shire’s offer of $37 per share. The investors filed a lawsuit in March 2007 claiming “breaches of fiduciary duty” by some of the TKT board members. A court dismissed most of the claims of that suit in a summary judgment rendered in June 2008, and a trial date of Dec. 10, 2008, was set.  However, the investors and Shire agreed on a cash settlement of $567.5 million, which represents the value of the initial share offer of $37 per share, or $419.9 million, plus interest of $147.6 million.  Shire claimed the Delaware Chancery Court approved the case’s dismissal and anticipated a payout to the affected shareholders on Nov. 7, 2008.

On Oct. 29, Shire reported total revenue of $779 million for the third quarter of 2008, up from $608 million from the same quarter of 2007.