(CN) - Shareholders claim in a class action that clinical stage pharmaceutical company Cempra Inc.'s pending merger with Melinta Therapeutics is predicated on dubious statements filed with the Securities Exchange Commission.
The companies announced on August 8 that Melinta, a biopharmaceutical company, will merge with a subsidiary of North Carolina-based Cempra. Each share of Melinta stock will be converted and exchanged for Cempra stock. Current Cempra investors will own approximately 48 percent of the combined companies while Melinta investors will own approximately 52 percent, according to the complaint.
Investors claim Cempra's directors filed a Preliminary Proxy Statement with the SEC on September 7 that allegedly left out, among other things, material information about the financial projections for the combined companies, as well as the valuation analyses performed by Cempra's financial advisor.
"The disclosure of projected financial information is material because it provides stockholders with a basis to project the future financial performance of a company, and allows stockholders to better understand the financial analyses performed by the company's financial advisor in support of its fairness opinion," the lawsuit states.
The lawsuit also alleges that the proxy statement omitted information related to conflicts of interest of Cempra's officers and directors and the "timing and nature" of "lucrative" severance agreements.
Investors claim that missing information renders certain sections of the proxy statement false and misleading and if disclosed, would "significantly alter the total mix of information available to Cempra's investors."
The deal, already approved by the board of directors of both companies, is expected to close in the fourth quarter of 2017.
The class is represented by J. Michael Malone of Hendren Redwine & Malone in Raleigh, N.C., and of counsel Richard A. Maniskas of RM Law, P.C., Berwyn, Pa.
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