On September 13, 2023, we filed a securities class action lawsuit in the United States District Court for the Southern District of New York (“Court”), captioned Zappia v. Myovant Sciences, Ltd. et al., Case No. 1:23-cv-08097, on behalf of a class (“Class”) of individuals and entities that held common stock of Myovant Sciences, Ltd. (“Myovant”) as of the close of business on January 20, 2023 (“Class Period”), asserting claims under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and Securities and Exchange Commission Rule 14a-9 promulgated thereunder, in connection with the acquisition of Myovant by Sumitovant Biopharma Ltd. for an unfair price.
The Allegations in the Lawsuit
A copy of the complaint is available for download in the right sidebar. Briefly, the complaint alleges as follows.
On Jan. 23, 2023, Myovant filed a proxy statement with the U.S. Securities and Exchange Commission with the goal of getting Myovant minority shareholders to vote in favor of the acquisition of Myovant by Sumitovant since the deal was “expressly conditioned” on approval by a majority of the minority shareholders.
The proxy stated that Sumitomo Pharma had obtained debt financing for the transaction from Sumitomo Mitsui Banking Corp. in the form of a senior unsecured term loan facility in an aggregate amount of Japanese yen equivalent to $1.7 billion.
The proxy further stated that Myovant’s board had retained the law firm of Skadden Arps to advise the special committee negotiating the merger and that the law firm had no conflicts of interest. But the complaint alleges that this representation was false since Skadden Arps was simultaneously representing Sumitomo Banking (which, as noted, was financing the merger), as well as other Japanese companies affiliated with Sumitomo Pharma via the Sumitomo Group keiretsu.
The complaint alleges that the defendants were obligated to disclose Skadden’s conflicts, but did not, and this material nondisclosure caused Myovant’s shareholders to approve a deal that undervalued Myovant. Specifically, the complaint alleges that Sumitovant would have been willing to pay as high as $29.50 a share for Myovant, but because after discussions with Skadden Arps and Goldman Sachs the special committee did not solicit competing bids, Sumitovant knew it could acquire Myovant at a lesser price.
Investors are hereby notified that not later than November 13, 2023, any member of the purported Class may move the Court to serve as lead plaintiff of the purported Class in this action.
If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending action, please complete and submit the form below, and one of our attorneys will get back to you promptly.