Akorn Inc. (NASDAQ: AKRX) shares were crushed early Monday after a Delaware judge ruled that German health care group Fresenius could walk away from its $4.75 billion deal for Akorn and rejected Akorn’s claim that the merger agreement had been breached.
Note that shares were halted as trading began on Wall Street.
Delaware’s Vice Chancellor Travis Laster noted that Fresenius validly terminated the merger agreement and he found Akorn’s representations regarding its compliance with regulatory requirements were “not true and correct.”
The deal originated late in April 2017, when Fresenius offered to buy Akorn for $34 per share, in an all cash transaction.
The company issued a statement in regards to the ruling:
We are disappointed by the ruling by the Delaware Chancery Court determining not to force Fresenius to close and we continue to believe Fresenius’ attempt to terminate the transaction is in breach of our binding merger agreement. We intend to appeal, in an effort to vigorously enforce our rights and continue to protect the interests of our Company and our shareholders.
Excluding Monday’s move, Akorn had underperformed the broad markets, with the stock down about 60% in the past 52 weeks.
Shares of Akorn were last seen trading down 55% at $5.77, with a consensus analyst price target of $27.25 and a 52-week range of $5.66 to $33.63.