Emageon, which provides technology for hospitals, healthcare networks and imaging facilities, says it and other defendants will settle a shareholder lawsuit filed against them in connection with the planned acquisition by AMICAS.
The suit was filed on March 13.
If the court approves, the lawsuit would be dismissed. Emageon maintains the suit is without merit, but executives want to avoid costly litigation and the risk of delaying the closing of the deal – and the merger – with AMICAS.
AMICAS announced in February plans to acquire Emageon in a $39 million deal. The news followed a Feb. 12 announcement that Health Systems Solutions had abandoned its plans to acquire Emageon due to a lack of funding.
"AMICAS and Emageon have a shared vision that is focused on providing outstanding image and information management solutions in healthcare," said Stephen Kahane, MD, president, CEO and chairman of AMICAS, in making the announcement.
Under the terms of the merger, AMICAS was to begin a tender offer by March 5. The transaction, which is subject to customary conditions, was expected to close in the second quarter of 2009.
To settle the shareholder lawsuit, Emageon has agreed to provide certain additional information to its stockholders regarding the pending offer by AMICAS and the proposed merger. The additional information, which will be provided through publicly available filings, will supplement the Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 that was previously mailed by Emageon.
Under the agreement, the shareholders agreed to drop the lawsuit. Emageon agreed not to object to a request by plaintiff's counsel for an award of fees and expenses. An award of fees and expenses to the plaintiff's counsel will not affect the amount to be paid in the merger.
The details of the settlement will be sent to Emageon's stockholders prior to a hearing before the court to consider both the settlement and any fee application filed by the plaintiff's counsel.
The additional information to supplement Emageon's Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 will also be set forth in a Current Report on Form 8-K that Emageon will file with the Securities and Exchange Commission.
