Minority shareholders seek better price in Novartis’ takeover of eye-care products maker Alcon

Minority shareholders seek to slow Alcon takeover

GENEVA — The minority shareholders of eye-care products maker Alcon, Inc. have filed a class-action lawsuit to prevent Swiss pharmaceutical giant Novartis AG from completing a $39 billion takeover of the company.

Lawyers for Alcon’s minority shareholders, representing 23 percent of the firm, said they have filed a lawsuit in U.S. District Court in New York against Alcon’s board of directors, buyer Novartis and majority shareholder Nestle for effectively setting two prices for the acquisition.

Novartis made a bid last week to become a leading player in the growing global eye-care market with the announcement that it plans to take over the 77 percent stake in Alcon it did not already own.

Novartis said it would buy Nestle SA’s 52 percent stake for $28 billion in cash before carrying out a merger with Alcon that would give it control of the whole company. The Basel-based drug maker had already purchased 25 percent of Alcon from Nestle in April 2008 for $11 billion, with the option of buying the food and drinks company’s remaining stake at a later date.

Minority shareholder lawyers said in a statement released Sunday from New York that their clients were being “squeezed out at an unfair price,” with their stock being sold for about $153 per share, or 18 percent less than the $180 per share Novartis agreed for Nestle’s remaining stake.

Alcon is incorporated in Switzerland but only trades on the New York Stock Exchange.

The nature of the statement indicated that the minority shareholders may want to improve the price of the transaction without seeking to block the final deal.

Novartis spokesman Eric Althoff said the company wouldn’t comment on pending litigation.

The drugmaker has argued that the price it is offering Alcon’s minority shareholders represents a 12 percent premium on what Novartis considered the unaffected Alcon share price of $137, before rumors of an imminent offer drove up the price of Alcon stock.