Ademi LLP is investigating Pieris (Nasdaq: PIRS) for possible breaches of fiduciary duty and other violations of law in its transaction with Palvella.
In the transaction, Pieris will issue shares of Pieris common stock to pre-merger Palvella stockholders as merger consideration in exchange for the cancellation of shares of capital stock of Palvella, and Palvella will become a wholly-owned subsidiary of Pieris. However, pre-merger Pieris stockholders are expected to own approximately 18% of the combined company and pre-merger Palvella stockholders are expected to own approximately 82% of the combined company. Pieris pre-merger stockholders will also be issued a contingent value right (CVR) representing the right to receive payments from, among other sources, proceeds received by the combined company, if any, under Pieris’ existing partnership agreements with Pfizer and Boston Pharmaceuticals.
The transaction agreement unreasonably limits competing transactions by Pieris as it imposes a significant penalty if Pieris accepts a competing bid. Pieris insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Pieris’ board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.