Ademi LLP is investigating Surface (Nasdaq: SURF) for possible breaches of fiduciary duty and other violations of law in its transaction with Coherus.
In the transaction, Coherus will issue shares of its common stock at a price of $5.2831 per share to acquire all outstanding shares of Surface stock for a total value equal to the sum of $40 million plus Surface’s net cash at closing (currently expected to be between $20 and $25 million). Surface shareholders will also receive CVRs for 70% of milestone and royalty-based value of existing programs with Novartis AG (NZV930) and GSK plc (GSK4381562), as well as CVRs for 25% of upfront payments made pursuant to potential ex-US licensing agreements for SRF114 and 50% of upfront payments made pursuant to potential ex-US licensing agreements for SRF388, subject to certain deductions. Amounts under these CVRs are payable for a period of ten years following the closing. The transaction agreement unreasonably limits competing bids for Surface by imposing a significant penalty if Surface accepts a superior bid. Surface insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Surface’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Surface.