Judge denies expedited lawsuit in ImClone buyout

By Grant McCool

NEW YORK, Oct 30 (Reuters) - A judge on Thursday denied a shareholder request to speed up a lawsuit challenging Eli Lilly and Co's (LLY.N) proposed $6.5 billion buyout of ImClone Systems Inc IMCL.O.

The lawsuit filed last week in New York State Supreme Court contends the agreement is unfair to ImClone stockholders, including the plaintiff, State-Boston Retirement System of Massachusetts.

A lawyer for the pension plan argued in court that the stockholders did not have enough information to decide whether to tender their shares and asked the judge to expedite discovery, which would allow the plaintiffs to obtain documents related to the deal and interview Lilly and ImClone officials under oath.

The plaintiffs had argued that the case needed to be speeded up because they have little time to challenge the deal. The tender offer is set to conclude Nov. 20, and Lilly has said it expects the buyout to close by the end of this year or in the first quarter of 2009.

ImClone's lawyers argued that the lawsuit did not have merit, telling Justice Richard Lowe that the deal was good for shareholders.

ImClone announced on Oct. 6 that it had accepted a $70-a-share buyout offer from Lilly. Lilly outbid Bristol-Myers Squibb Co (BMY.N), which offered $62 per share in the takeover battle for ImClone, maker of cancer drug Erbitux and several experimental medicines.

"You have not made a significant case for early discovery," Lowe told the lawyers for the pension plan.

The lawsuit accuses ImClone's board of directors, including billionaire investor Carl Icahn, who is the biotechnology company's chairman, of breaching its fiduciary duties in agreeing to the deal. Lilly was also named as a defendant.

One lawyer for the shareholders, Jonathan Gardner, said after the hearing that the plaintiffs would move forward with the case despite the ruling. He said the plaintiffs were considering asking the judge to issue an injunction blocking the deal from going forward without having the benefit of the discovery they had sought.

ImClone was trading up 0.18 percent at $68.68 per share. Lilly shares were 2.15 percent higher at $32.72. (Additional reporting by Martha Graybow; Editing by Lisa Von Ahn)