Change Healthcare stockowners have approved the company’s $13 billion merger deal with UnitedHealth Group, the Nashville-based radiology vendor announced Wednesday. Meanwhile, nine lawsuits have been filed challenging the proposal.
Out of some 222 million shares of the tech firm, 99.9% voted in favor at a special meeting held April 13. However, a pension fund filed suit against Change the same day, concerned the company’s board and backers at Blackstone Group are pushing the sale to maximize payments to themselves, Bloomberg reported.
“While insiders are receiving significant and unique financial benefits from the proposed transaction, Change stockholders are being left with an unfair price for their shares that fails to reflect the company’s strong growth prospects,” the complaint stated.
Altogether, nine lawsuits challenging the transaction had been filed as of April 7, Change revealed in a recent filing with the U.S. Securities and Exchange Commission. One was already dismissed back in March. Those filing suit have charged that Change, among other things, has made misleading or incomplete statements about the merger to its shareholders.
Loretta Cecil, executive VP and general counsel, called the claims “without merit.”
“Change and the other named defendants deny that they have violated any laws or breached any duties to Change’s stockholders,” she wrote in the SEC filing, which details certain early termination payments to the company’s executives and directors, if the merger moves forward.
UnitedHealth Group, which also operates the nation’s largest commercial health plan, first announced the proposed acquisition in January. If approved, it plans to fold Change into its Optum business unit. Provider groups including the American Hospital Association—and more recently the American Medical Association—have voiced concerns that the merger will reduce competition in the field. The Department of Justice is currently reviewing the deal following those complaints.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.