WellPoint, Amerigroup amend acquisition deal to settle shareholder lawsuit
Amerigroup has agreed to amend its deal with WellPoint, which announced in July that it was acquiring the Medicaid insurer for $4.9 billion, over claims that it inappropriately negotiated the buyout.
Amerigroup investors sued the board in August, alleging that its directors and their financial adviser Goldman Sachs placed their own interests before those of the shareholders. It claimed that Goldman pressured Amerigroup into accepting WellPoint's offer instead of a more lucrative deal with a different company, Reuters reported.
To settle that lawsuit, Amerigroup has delayed its Oct. 9 annual meeting, which included a stockholder approval vote on the WellPoint deal. The meeting and the vote are rescheduled for Oct. 23. Meanwhile, Amerigroup said it's "prepared to receive and consider in good faith any inquiries and superior proposals" to buy the company, Dow Jones Newswires reported.
Both Amerigroup and WellPoint also agreed to reduce the deal's breakup fee so that if Amerigroup finds a higher bidder than WellPoint, it only would have to pay $97 million instead of $146 million, Bloomberg reported.
However, officials from both insurance companies denied any wrongdoing related to the acquisition, agreeing to the settlement terms simply to "avoid the costs, risks and uncertainties inherent in litigation," noted Dow Jones Newswires.
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