DJO Inc. shareholders filed a class action lawsuit Aug. 31 in Superior Court alleging the Vista orthopedic products manufacturer failed to disclose important information in its proxy materials during the company’s pending sale to an affiliate of the Blackstone Group.
The lawsuit also charged DJO executives with breach of fiduciary duty. It claimed the company’s directors would receive executive compensation as a result of the proposed sale and, consequently, would be unable to act fairly to ensure the best interest of the company and its shareholders.
DJO filed a copy of the class action complaint with the Securities and Exchange Commission Sept. 7.
DJO said July 16 that it had entered into a merger agreement with Austin-based ReAble Therapeutics Inc. and a subsidiary for a deal worth a potential $1.6 billion. The Blackstone Group is the controlling shareholder of ReAble.
DJO shareholders would receive $50.25 in cash for their shares of DJO common stock under the proposed merger agreement. The lawsuit alleged that amount was “significantly below the 52-week high price of $53.55.”
DJO recommended stockholders approve the merger, which was contingent on regulatory approvals. DJO announced it had obtained the necessary antitrust approvals early, on Aug. 9.
, Heather Chambers