Shares of Akorn Inc (NASDAQ:AKRX) took a nosedive after a judge ruled that German health care company Fresenius Medical Care (NYSE:FMS) can end its $4.8 billion bid for the company.
Akorn shares plummeted nearly 57% to $5.66 in Monday morning trading while Fresenius shares rose about 2.5% to $52.67.
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After inking the deal, an independent investigation revealed that generic drugmaker Akorn had a history of fraudulent product data submissions. Fresenius, a provider of kidney dialysis care, sought to end the agreement.
In turn, Akorn sued Fresenius in the Court of Chancery in Delaware, alleging that the company was suffering from buyer’s remorse.
Delaware Vice Chancellor Travis Laster found that Fresenius’ termination of the merger was valid, citing Akorn’s compliance issues.
Laster wrote that Akorn's "magnitude of inaccuracies would reasonably be expected to result in a material adverse effect," as per a Reuters report.
The judge also found that Akorn had failed to continue operating as normal after signing the deal.
“We are disappointed by the ruling by the Delaware Chancery Court determining not to force Fresenius to close and we continue to believe Fresenius’ attempt to terminate the transaction is in breach of our binding merger agreement,” said Akorn in a post-judgement press release.
Akorn said it intends to appeal the decisions in an effort to protect its shareholders.