Amid infighting over the possible buyout of the outstanding shares of USANA Health Sciences Inc., a group of shareholders has sued the company, seeking to stop the transaction.
A group of investors led by USANA chairman and chief executive officer Myron Wentz wants to buy the outstanding shares for $26 per share. A committee of the company's board of directors, however, has said the offer is inadequate.
The lawsuit, filed by shareholders Richard Earp and Chris Riccardi, seeks class-action status on behalf of all common stockholders, as well as an order nixing the deal. The lawsuit names as defendants Wentz, the company and directors Ronald Poelman, Robert Anciaux and Jerry McClain and USANA Health Sciences Inc.
Gull Holdings Ltd. and Unity Acquisition Corp. said in May that they would make a tender offer to acquire outstanding USANA shares for $26 per share, in a move to take the company private. Wentz controls Gull, and Gull and its affiliates control about 68 percent of USANA common stock.
The lawsuit claims the defendants violated their fiduciary duties by failing to maximize shareholder value and failing to disclose "all information material to the decisions confronting USANA's shareholders."
Gull's proposal is "at an unfair price, under unfair terms and without adequate disclosure," the lawsuit states, citing that for more than two years before the tender offer announcement, USANA shares had traded between $30 and $60 per share.
The proposed transaction "seeks to capitalize on the temporary decline in the company's stock price by attempting to purchase the minority shares of the public float at a low-ball price," according to the lawsuit, which was filed this month in Utah's 3rd District Court.
The plaintiffs' attorney, Natali Morris, did not return phone calls seeking comment Tuesday. USANA spokesman Dan Macuga also did not return a phone call seeking comment.
On Friday, a special committee to the USANA board urged a rejection of the Wentz offer after unanimously determining it to be "inadequate and not in the best interests of USANA's shareholders." The committee said it reached that decision after considering the offer, the company's "prospects and value," a financial adviser's opinion and "other relevant facts and information" spelled out in an amendment filed with the Securities and Exchange Commission.
In reply, Gull and Unity Acquisition on Monday reaffirmed their $26-per-share offer.