The Ademi Firm is investigating Endo (OTCQX: NDOI) for possible breaches of fiduciary duty and other violations of law in its transaction with Mallinckrodt.
In the transaction, Endo shareholders will receive only $80 million in cash (subject to possible adjustment) and Endo shareholders will own 49.9% of the combined company on a pro forma basis. After cash consideration, Mallinckrodt shareholders will own 50.1% of the combined company on a pro forma basis, for an implied pro forma enterprise value of $6.7 billion. Endo insiders will receive substantial benefits as part of change of control arrangements.
The transaction agreement unreasonably limits competing transactions for Endo by imposing a significant penalty if Endo accepts a competing bid. We are investigating the conduct of the Endo board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.