New York-based Wolf Popper LLP said Thursday it wants to shelve a proposed merger between Irvine’s Cardiac Science Inc. and Bothell, Wash.’s Quinton Cardiology Systems Inc.
The law firm filed a class-action suit on behalf of Cardiac Science’s shareholders, seeking to block the company’s proposed combination with Quinton.
Wolf Popper argues the proposed merger between defibrillator maker Cardiac Science and cardiology monitor maker Quinton “is grossly unfair to Cardiac Science’s public shareholders,” the law firm said in a release.
The complaint alleges that in addition to providing inadequate consideration to Cardiac Science’s public shareholders, the proposed deal gives “a dominant member of the board” preferential treatment.
Cardiac Science’s shareholders, together with senior bondholders, will own about 51% of the combined company, and Quinton’s shareholders will own 49%.
Owners of Cardiac Science’s senior debt agreed to exchange their notes and accrued interest worth about $61 million for $20 million in cash and $53.8 million, or about 13% of the combined company’s common stock.
The new management team will be led by John R. Hinson, Quinton’s current chief executive, and Michael K. Matysik, its chief financial officer, who will each continue in those roles for the combined company.
The deal was approved by the boards of both companies and is expected to close in the third quarter.
