Alleging violations of the Securities Exchange Act, lone LHC Group shareholder David Schuppert filed suit seeking an injunction to prevent Optum and LHC Group from proceeding with a planned merger until all relevant information is shared. The suit claims that the preliminary proxy statement LHC Group filed with the U.S. Securities and Exchange Commission (SEC) leaves out the company’s financial projections, analyses completed by financial advisors, and potential conflicts of interest, among other things.
UnitedHealth Group (UHG) subsidiary Optum works with more than 100 health plans, managing drug benefits and offering data analytics services. Optum announced in March a roughly $5.4 billion plan to acquire in-home healthcare service provider LHC Group. In April, LHC Group filed a preliminary proxy statement recommending that shareholders approve the acquisition. Shareholder Schuppert alleges that LHC Group shareholders will vote without full disclosure of necessary information regarding the merger’s background, the board’s recommendations for the merger, and any potential financial impacts. The suit also seeks rescissory damages if the merger goes through.
LHC Group’s 30,000 employees annually complete upwards of 12 million in-home, patient-focused interventions for individuals living with chronic illnesses or injuries. The two companies say LHC Group’s quality scores run about one-third higher than the industry average; Optum says the merger will improve the combined companies’ ability to deliver integrated care and thereby produce better patient outcomes.
Optum proposes acquiring LHC Group’s common stock for $170 per share in cash. The merger could close in the latter half of 2022 subject to shareholder approvals, regulatory approvals, and other customary closing conditions. Following the close of the merger, LHC Co-Founders Keith and Ginger Myers plan to personally invest $10 million in UHG stock. The LHC Group leadership team is expected to stay on as part of Optum Health.