TV lawyer leads wave of opposition to M&A, starting with animal health

Hilary Kramer

Hilary Kramer is a high-profile lawyer, stock picker and television commentator who has filed more than 40 class-action lawsuits against companies planning mergers or acquisitions, mostly on the grounds that the deals are unfair to shareholders. Among her targets: Animal Health International, a maker of drugs for livestock that was acquired by rival Lextron in 2011 for $251 million.

Kramer felt the buyout price of $4.25 a share was too low, according to an investigative report in Reuters, and she sued to halt the deal. She was unsuccessful, but the attempt--and the myriad investor lawsuits that she initiated makes Kramer "most litigious of all American individual investors" who have sued to stop buyouts, according to Reuters' analysis, as well as one of the leading forces in a new wave of mass litigation targeted at M&A.

Kramer alone has sued to halt $100 billion in corporate deals, according to Reuters, though she said in an interview that she gets no money from the cases. She has never won any money for the shareholders she represents, either, but her lawyers have made plenty: at least $14 million by Reuters' calculations.

The case against Animal Health International began in February 2011, when Kramer appeared on the PBS Nightly Business Report and predicted the price of the company would double because of a commodities boom. A few weeks later, Lextron made its buyout bid, but Animal Health International's stock price only rose 10%, according to Reuters, sparking Kramer's suit.

Kramer and other plaintiffs reached a settlement with the company that didn't change the price or affect the deal. The two companies merged and went private under the name Animal Health International. The company declined to comment for the Reuters story.

Since then, Kramer has led suits against companies ranging from California Pizza Kitchen to Catalyst Health Solutions. She's not alone: Class action lawyers filed lawsuits challenging 94% of all M&A deals worth at least $100 million in 2013, according to consulting firm Cornerstone Research. The suits are typically filed within days of the merger announcement and generally cite public documents and analyst reports in arguing that the proposed purchase prices are too low.

The animal health industry is still in the crosshairs of lawyers seeking to bar M&A deals. After drug wholesaler AmerisourceBergen ($ABC) announced its plan to acquire MWI Veterinary Supply ($MWIV) for $2.5 billion in January, more than a half-dozen law firms announced that they were launching investigations into the deal and encouraged shareholders to contact them to discuss claims.

Kramer has not jumped into this one, but the chorus of opposing legal voices is still notable, considering AmerisourceBergen's offering price of $190 a share was 17% higher than MWI's average trading price had been in the previous three months. So far, the deal is moving ahead unimpeded and is expected to close in the March quarter.

- here's the Reuters story