Shareholder Challenges Fujifilm’s Cellular Dynamics Acquisition

Xconomy Wisconsin — 

Fujifilm’s $307 million purchase of Wisconsin stem cell company Cellular Dynamics International is being challenged in court by a shareholder who claims the deal unfairly benefits the company’s board members and fleeces outside investors, according to online court records and the Wisconsin State Journal.

Fujifilm, the Tokyo-based international conglomerate that has been expanding further into healthcare, announced the all-cash deal for Cellular Dynamics (NASDAQ: ICEL) on Monday. The Madison-based company, aka CDI, uses induced pluripotent stem cell technology to manufacture living human cells in massive quantities for the purposes of drug toxicity testing, cell banking, and research into cellular therapies, or regenerative medicine.

Michael Kahl, a CDI shareholder who lives in Oregon, WI, filed the class-action lawsuit Wednesday in Dane County Circuit Court, where CDI is based. The suit, according to the Wisconsin State Journal, is asking a judge to block the sale because it’s the result of a “hopelessly flawed process” that will mean a windfall for CDI’s board members and top executives—who own nearly 24 percent of the company—at the expense of individuals with smaller stakes.

The $307 million acquisition equates to $16.50 per share, more than double CDI’s closing stock price of $7.94 per share before the deal was announced. But the lawsuit reportedly says that at least one financial analyst pegged CDI’s target price at $24.07 per share.

CDI stock closed at $16.47 per share Wednesday and was trading around $16.45 Thursday morning.

CDI officials didn’t immediately respond to a request for comment.