SysteMed Sued by Shareholder Over ‘Poison Pill’
SysteMed Inc. is being sued by a shareholder who contends the company’s board is unfairly deterring potential takeover bids.
The suit, which seeks class-action status, asks the Delaware Chancery Court in Wilmington to revoke the shareholder rights plan, or “poison pill,” adopted by the board on Aug. 17. Poison pills are designed to make hostile takeovers prohibitively expensive.
The suit, filed Thursday, also attacks an amendment to SysteMed’s bylaws, enacted the same day, that limits who may call a special meeting of the company’s stockholders. It names SysteMed and its board members as defendants.
The shareholder, Croyden Associates, whose SysteMed stake was not disclosed, claims board members are seeking to protect their jobs at the expense of shareholders.
A spokeswoman at SysteMed headquarters in Laguna Hills said the company has no comment.
SysteMed, a manager of prescription drug programs, has not said what triggered its board’s actions, but on Aug. 5 a financing unit for National Intergroup Inc. took a 6.3% stake in SysteMed and said it may seek control, according to documents filed with the Securities and Exchange Commission.
Intergroup then lifted its stake to 7.8%, or 1.68 million shares, on Aug. 12. Intergroup, which is based in Carrollton, Tex., distributes a line of pharmaceuticals.
Drug makers Merck & Co., Eli Lilly & Co. and SmithKline Beecham Plc have recently paid hefty premiums to acquire drug claim managers such as SysteMed. The drug companies see the acquisitions as a way to control distribution to large buyers of pharmaceuticals, such as managed-care plans.