07 Dec 2016 Cases

Abbott/Alere Material Adverse Effect Litigation

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On January 30, 2016, Abbott Labs and Alere Inc. entered into a merger agreement whereby Abbott would acquire all of Alere’s outstanding shares for $56 per share in cash. On December 7, 2016, Abbott sued in Delaware Chancery Court for a declaratory judgment that (i) the events that occurred after Alere signed the merger agreement had or would reasonably be expected to have a Material Adverse Effect (MAE) as that term is defined in the Merger Agreement, and (ii) that as a result Abbott was entitled to terminate the merger. Shortly before trial, the parties reached an agreement to move forward with the deal at a lower price of $51 per share. Compass Lexecon President Professor Daniel R. Fischel was retained by Kirkland & Ellis LLP, counsel for Abbott, to analyze the valuation effects of the alleged adverse events on Alere’s standalone value. We also supported the work of Professor Roman Weil, who was retained to analyze the accounting and stock market implications associated with Alere’s reported material weaknesses in internal controls. Professor Fischel was assisted by a team in our Chicago office led by David Ross, Rajiv Gokhale and Jessica Mandel. Professor Weil was supported by a Compass Lexecon team led by Jennifer Milliron. We worked with Andrew Kassof, James Hurst, Alec Solotorovsky, Nader Boulos, Ryan Moorman and others of Kirkland & Ellis and William Savitt, Jeffrey Wintner, Carrie Reilly and others of Wachtell Lipton Rosen & Katz.

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