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Shareholder sues Clinical Data over Forest merger
* Clinical Data sold too cheaply, lawsuit says
* Says terms of deal to prevent higher bids
* Says company chairman wanted to sell
WILMINGTON, Del., March 1 (Reuters) - A shareholder sued Clinical Data Inc CLDA.O on Tuesday over its deal to sell itself to Forest Laboratories Inc (FRX.N), accusing it of selling too cheaply and shutting out other bidders.
Bradley Wojno, an individual investor, sued the company and its board in Delaware's Chancery Court, seeking class action status, and asked the court to block the proposed sale to Forest Laboratories for $1.2 billion.
The lawsuit blasted a "no solicitation" clause in the terms of the agreed merger and a provision that would provide Forest with a $45 million break-up fee if Clinical Data should decide to pursue a competing offer, according to court documents.
The $30 per share offer was below Clinical Data's market value and caused Clinical shares to tumble when the deal was announced last week.
The deal will give Forest the newly approved antidepressant Viibryd as it seeks to address looming generic competition for its biggest product -- the antidepressant Lexapro, which is set to lose U.S. patent protection early next year.
Forest, based in New York City, pledged additional payments of up to $6 a share if Viibryd achieves certain commercial milestones.
If Clinical Data, of Newton Massachusetts, considers a competing offer and decides it is superior, the board is required to grant Forest three days to make a counter offer that the board must consider.
"Accordingly, no rival bidder is likely to emerge and act as a stalking horse, because the Merger Agreement unfairly assures that any 'auction' will favor Forest," said the lawsuit.
The lawsuit also alleged that Clinical Data's chairman, Randal Kirk, who owns nearly 50 percent of the company, wants to sell his stake to invest in other projects.
Clinical Data did not immediately return a call for comment.
The case is Bradley Wojno v Andrew Fromkin et al, Delaware Chancery Court, No. 6233. (Reporting by Tom Hals; Editing by Gary Hill)
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