A class action lawsuit has been filed in the USA on behalf of minority shareholders in Alcon who are trying to throw a spanner in the works of Novartis’ $39.1 billion takeover of the eye care specialist.

The suit has been filed in a New York court against Alcon's board of directors, Novartis and Nestle which is selling its stake to the Swiss major. The problem is that Novartis is purchasing the 52% stake in Alcon owned by Nestle for $180 per share in cash, which will give it a 77% holding, but plans to buy out the 23% stake held by minority shareholders for much less, $153 per share.

One of the law firms involved in the suit, Labaton Sucharow, claims that “Novartis is effectively treating the proposed merger as transaction above the law” and that the company “has brazenly touted that no law protects Alcon’s minority shareholders—most of whom are American institutional investors—and that no law restricts its ability to thrust the proposed merger upon the Alcon’s minority shareholders”.

The lawyers go on to say that Novartis is “using its de facto status as Alcon’s majority and controlling shareholder to ram the proposed merger through to the lopsided detriment” of minority public shareholders. The deal is “structurally coercive and clearly offers the class of Alcon’s minority shareholders an unfair price”, they add.

Christopher Keller, a partner at Labaton Sucharow, said that “a simultaneous offer with such a significant disparity between the majority and minority shareholders is extremely unusual and rare”. He added that the latter group “should be afforded the opportunity to seek meaningful legal recourse”.

Swiss law allows Novartis to force through a takeover once it takes majority control from Nestle and observers are waiting to see whether it sweetens its offer to minority shareholders before battle commences in a courtroom.

Fanapt launched in USA
Better news for the Basel-based group came with the news that it has launched the schizophrenia Fanapt, (iloperidone) in the USA, The drug, which was approved by the Food and Drug Administratin in May, is a twice-daily, oral antipsychotic developed by Vanda Pharmaceuticals and in October Novartis licensed the North American rights to the pill.

Novartis also has the rights to develop and commercialise a long-acting injectable formulation of Fanapt in the USA and Canada.