ATS Medical of Minneapolis is under investigation after reports that the company breached fiduciary duty to its shareholders by agreeing to sell the company to Medtronic in a cash deal valued at almost $370 million.
According to the Law Offices of Howard G. Smith, whose office is heading the investigation, company shareholders will receive $4 for each share of company stock owned. However, the law office said “the deal is suspicious because it appears from a review of the company's financial statements that the inherent value of the company's stock is greater than $4 per share.”
The law office is accusing ATS’ board of failing to search for additional potential buyers in order to ensure that their shareholders received the best price. According to an analyst, the stock could be worth as much as $5 per share.
Additionally, they said that ATS’ board of directors “agreed to terms with Medtronic that dissuaded better offers from other potential bidders.”
Under the terms of the merger, ATS will become a wholly owned subsidiary of Minneapolis-based Medtronic.