Ademi LLP is investigating Magenta (Nasdaq: MGTA) for possible breaches of fiduciary duty and other violations of law in its transaction with Dianthus.
Magenta stockholders are expected to own only approximately 21.3% of the combined company. The percentage of the combined company that Magenta’s stockholders will own is subject to adjustment based on the amount of Magenta’s net cash at closing. Immediately prior to the proposed merger, Magenta stockholders will be issued contingent value rights representing the right to receive certain payments from proceeds received by the combined company, if any, related to pre-transaction legacy assets. The transaction agreement unreasonably limits competing bids for Magenta by imposing a significant penalty if Magenta accepts a superior bid. Magenta insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Magenta’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Magenta.