MModal Inc. (MODL:US), a maker of medical- transcription software, was sued by a shareholder contending he will be shortchanged in a planned $1.1 billion takeover by a unit of JPMorgan Chase & Co. (JPM:US)
Directors of the Franklin, Tennessee-based company “agreed to the buyout at an inadequate price,” Alan Kahn, the owner of 24,820 MModal shares, said in a complaint filed today in Delaware Chancery Court in Wilmington.
“The company has performed well for its investors in the past and is expected to do so in the future,” Kahn said in the complaint. He asked a judge to stop the deal and award damages.
MModal said July 3 that it had agreed to be acquired by JPMorgan’s One Equity Partners for $14 a share, an 8.3 percent premium at the time, and a tender offer would begin by July 17.
Dave Levy, an MModal spokesman at Shift Communications in Boston, said the company had no comment on the lawsuit.
MModal rose 5 cents to $14.05 today. The shares have climbed 46 percent this year.
The case is Kahn v. Davenport, CA7675, Delaware Chancery Court (Wilmington).
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