UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW...

Case 2:13-cv-04566-ES-SCM Document 1 Filed 07/29/13 of 34 PageID: 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

CLIFFORD G. MARTIN, Individually and on behalf of all others similarly situated,

Plaintiff,

v.

WARNER CHILCOTT PUBLIC LIMITED COMPANY,

Defendant.

Case No.

JURY TRIAL DEMANDED

CLASS ACTION COMPLAINT

Plaintiff, by and through his attorneys, alleges upon personal knowledge as to himself, and

upon information and belief based upon, among other things, the investigation of counsel as to all

other allegations herein, as follows:

SUMMARY OF THE ACTION

1. This is a shareholder class action on behalf of the holders of the common stock of

Warner Chilcott Public Limited Company (“Warner Chilcott” or “Company” or “Defendant”)

seeking, among other things, to enjoin the shareholder vote relating to the acquisition of the

publicly owned shares of Warner Chilcott common stock by Actavis, Inc. (“Actavis”) as detailed

herein (“Proposed Transaction”). This action arises out of Defendant’s violations of Section 14 of

the Securities Exchange Act of 1934 (“Exchange Act”) and US Securities and Exchange

Commission (“SEC”) Rule 14 promulgated thereunder (“Rule 14”).


2. On May 20, 2013, Warner Chilcott and Actavis jointly announced that they had

entered into a definitive agreement under which Actavis would acquire all of the outstanding,

publicly-held common shares of Warner Chilcott (“Merger Agreement”). At the close of the

transaction, which is expected by year-end 2013, Actavis and Warner Chilcott will be combined

in a new company (“New Actavis”). The newly created company will be led by the current

Actavis leadership team. Under the terms of the transaction, Warner Chilcott shareholders will

receive 0.160 shares of New Actavis for each Warner Chilcott share they own.

3. On June 18, 2013, Actavis Limited (a wholly owned subsidiary of Actavis formed

in May 2013 for purposes of facilitating the Proposed Transaction) filed a Form S-4 registration

statement for New Actavis shares with the SEC (“Registration Statement”). The Registration

Statement included a preliminary joint proxy statement/prospectus on behalf of Warner Chilcott

and Actavis to solicit shareholder votes in connection with the Proposed Transaction.

4. In violation of Section 14 of the Exchange Act, the Registration Statement contains

a number of material omissions concerning, among other things: (a) the background of the

transaction; (b) key management projections; (c) the financial analysis of Warner Chilcott’s

financial advisor, Deutsche Bank Securities, Inc. (“Deutsche Bank”), (d) the financial analyses of

Actavis’s financial advisors, Bank of America Merrill Lynch (“BofA Merrill Lynch”) and

Greenhill & Co. (“Greenhill”), and (e) potential conflicts of interest of the respective financial

advisors. It is critical that Warner Chilcott’s public shareholders receive complete and accurate

information about the Proposed Transaction in order to enable them to decide whether to vote in

favor of the Proposed Transaction.

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5. These omissions and misstatements are a violation of Section 14 of the Exchange

Act. As set forth in detail below, without the material information, Warner Chilcott’s shareholders

cannot make an informed decision as to whether or not they should vote in favor of the Proposed

Transaction.

6. To remedy Defendant’s misconduct, Plaintiff seeks, among other things, injunctive

relief preventing consummation of the Proposed Transaction unless and until the Company

discloses all material information concerning the Proposed Transaction to Warner Chilcott’s

shareholders.

7. For these reasons, and as set forth in detail herein, Plaintiff seeks to enjoin the

shareholder vote relating to the Proposed Transaction or, in the event the Proposed Transaction is

consummated, recover damages resulting from the Defendant’s violations of law.

PARTIES

8. Plaintiff is, and at all relevant times was, a continuous stockholder of Warner

Chilcott.

9. Defendant Warner Chilcott is incorporated in Ireland with its registered office at 1

Grand Canal Square, Docklands, Dublin 2, Ireland. Warner Chilcott ordinary shares trade on the

NASDAQ Stock Market, and it makes regulatory filings with the SEC. The Company operates in

the United States and maintains its corporate office located at 100 Enterprise Drive Rockaway,

New Jersey 07866.

JURISDICTION AND VENUE

10. Jurisdiction is founded upon federal question jurisdiction, pursuant to §27 of the

Exchange Act, as amended, 15 U.S.C. §78aa, and 28 U.S.C. § 1332.

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11. Venue is proper under 28 U.S.C. § 1391(b)(2) because Warner Chilcott’s US

corporate office is located at 100 Enterprise Drive, Rockaway, NJ 07866 and meetings between

the companies and their respective advisors relating to the Proposed Transaction took place at

Actavis’s headquarters which is located at Morris Corporate Center III 400 Interpace Parkway

Parsippany, New Jersey 07054. As disclosed in the Registration Statement, representatives of both

companies, as well as their respective financial and legal advisors, met in Parsippany to negotiate

essential terms of the Proposed Transaction, including the proposed consideration, the timing of

the transaction. Moreover, senior management of Warner Chilcott and Actavis engaged in in-

person management meetings in Parsippany, New Jersey to discuss other key issues relating to the

Proposed Transaction, including certainty of closing, financing-related issues, regulatory

approvals, and governance of the combined company. This venue is the most appropriate of the

available venues, since most, if not all, of the relevant documents and witnesses are reasonably

close to this venue. Each of the three financial analysts who rendered fairness opinions are located

near this venue. Deutsche Bank has its principal executive offices at 60 Wall Street, New York,

NY 10005; BofA Merrill Lynch, has its principal executive offices at One Bryant Park, New

York, NY 10036; and, Greenhill, has its principal executive offices at 300 Park Avenue, New

York, NY 10022. Legal counsel for the parties to the transaction are similarly located near this

venue. Defendant’s counsel, Davis Polk & Wardell, LLP, has its offices at 450 Lexington

Avenue, New York, NY 10017. Actavis’s legal counsel Latham & Watkins, LLP, has offices at

885 Third Avenue, New York, New York 10022.

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CLASS ACTION ALLEGATIONS

12. Plaintiff brings this action on his own behalf and as a class action pursuant to Fed.

R. Civ. P. 23 on behalf of all holders of Warner Chilcott who are being and will be harmed by

Defendant’s actions described herein (“Class”). Excluded from the Class are the Defendant

herein, and any person, firm, trust, corporation or other entity related to or affiliated with the

Defendant.

13. This action is properly maintainable as a class action because:

a. The Class is so numerous that joinder of all members is impracticable.

According to the Registration Statement, as of June 18, 2013, there were approximately

251.123 million Warner Chilcott shares outstanding. The actual number of class members

will be ascertained through discovery.

b. There are questions of law and fact that are common to the Class,

including:

i) whether Defendant violated Section 14 of the Exchange Act in

connection with the Proposed Transaction; and

ii) whether Plaintiff and the other members of the Class would suffer

irreparable injury if the alleged omissions are not corrected before

the shareholder vote on the Proposed Transaction.

c. Plaintiff is an adequate representative of the Class, has retained competent

counsel experienced in litigation of this nature, and will fairly and adequately protect the

interests of the Class.

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d. Plaintiff’s claims are typical of the claims of the other members of the

Class and Plaintiff does not have any interests adverse to the Class.

e. The prosecution of separate actions by individual members of the Class

would create a risk of inconsistent or varying adjudications with respect to individual

members of the Class that would establish incompatible standards of conduct for the party

opposing the Class.

f. Defendant has acted on grounds generally applicable to the Class with

respect to the matters complained of herein, thereby making appropriate the relief sought

herein with respect to the Class as a whole.

SUBSTANTIVE ALLEGATIONS

I. BACKGROUND

14. Warner Chilcott is a leading specialty pharmaceutical company currently focused

on the Women’s Healthcare, Gastroenterology, Urology and Dermatology segments of the

branded pharmaceuticals market, primarily in North America. Warner Chilcott is a fully

integrated company with internal resources dedicated to the development, manufacture and

promotion of its products.

II. THE PROPOSED TRANSACTION

15. On May 20, 2013, Warner Chilcott and Actavis issued a joint press release

announcing the Proposed Transaction:

PARSIPPANY, N.J. and DUBLIN, IRELAND – May 20, 2013 – Actavis, Inc. (NYSE: ACT) and Warner Chilcott plc (NASDAQ: WCRX) today announced they have entered into a definitive agreement under which Actavis will acquire Warner Chilcott plc in a stock-for-stock transaction valued at approximately $8.5 billion. If successfully completed, the transaction will create a leading global specialty

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pharmaceutical company with approximately $11 billion in combined annual revenue, and the third-largest U.S. specialty pharmaceutical company with approximately $3 billion in annual revenues focused on core therapeutic categories of Women’s Health, Gastroenterology, Urology and Dermatology. The proposed transaction has been unanimously approved by the Boards of Directors of Actavis, Inc. and Warner Chilcott plc, and is supported by the management teams of both companies.

“We have set as our strategic corporate objective to build a leading global specialty pharmaceutical company,” said Paul Bisaro, President and CEO of Actavis. “The combination of Actavis and Warner Chilcott creates a strong specialty brand portfolio focused in therapeutic categories with strong growth potential, and is supported by a deep pipeline of development programs. The combination is commercially and financially compelling, and reshapes the specialty pharmaceutical universe by creating a powerful global competitor. It creates a company with an exceptionally strong balance sheet, coupled with a favorable tax structure to support future growth.

“Commercially, this transaction is unique in the combination of the complementary strengths of our two companies,” Bisaro added. “The combination will enhance the value of each company’s portfolio and provides a substantial foundation to support the successful launch of new products over the next several years, particularly in Women’s Health, including Minastrin 24 Fe, Esmya, metronidazole vaginal gel 1.5%, the progestin-only contraceptive patch and other women’s health products in development from the recent acquisition of Uteron Pharma SA. It also provides an expanded portfolio of specialty products that have the potential to be commercialized in key markets outside of North America.”

“The Warner Chilcott team has built a powerful specialty brands business with a strong pipeline, and this compelling transaction brings together two complementary organizations with the potential to create even more value for shareholders,” said Roger Boissonneault, President and CEO of Warner Chilcott. “Paul Bisaro and his team have been executing on their vision to build a global and diverse company at the forefront of the specialty pharmaceutical industry, and the addition of Warner Chilcott should enhance the ability of the combined company to successfully execute that vision, and accelerate Actavis’ evolution.”

At the close of the transaction (the “Effective Date”), which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated. The newly created company, which is expected to be called Actavis plc, or a variant thereof (“New Actavis”), will be led by the current Actavis leadership team.

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Under the terms of the Transaction Agreement, at closing Warner Chilcott shareholders will receive 0.160 shares of New Actavis for each Warner Chilcott share they own, which equates to a value of $20.08 per Warner Chilcott share based on Actavis’ closing share price of $125.50 on May 17, 2013. This represents a 43 per cent premium compared to Warner Chilcott’s volume-weighted average trading price of $14.00 for the 30 trading day period ending on May 9, 2013 (the day before Warner Chilcott disclosed it was engaged in preliminary discussions with Actavis) and a 34 per cent premium to the Warner Chilcott closing share price on May 9, 2013 of $15.01. Based on the closing prices of Actavis shares and Warner Chilcott shares on May 9, 2013 of $106.81 and $15.01 each respectively, the value of the consideration payable per Warner Chilcott share would be $17.09 which would represent a premium of 14 per cent over the Warner Chilcott closing share price on such date.

The transaction is expected to be tax-free, for U.S. federal income tax purposes, to Warner Chilcott shareholders. Actavis shareholders will receive one share of New Actavis for each Actavis share they own upon closing. The transaction will be taxable, for U.S. federal income tax purposes, to Actavis shareholders.

Immediately after the close of the transaction, Warner Chilcott shareholders are expected to own approximately 23 per cent of New Actavis. Shares of New Actavis are expected to trade on the New York Stock Exchange under the ticker symbol ACT.

Expanded Specialty Portfolio in Four Therapeutic Categories

• The combined company will have a stronger foundation to market a complementary product portfolio in key specialty areas:

• In Women’s Health, with eight products including contraceptives, infertility treatments and hormone therapy products;

• In Urology, with six marketed products for treatment of overactive bladder, testosterone replacement, prostate cancer and benign prostatic hyperplasia (BPH);

• In Gastroenterology, with two marketed products for the treatment of ulcerative colitis;

• In Dermatology, with one marketed product and the expected commercial launch of a newly approved product in July 2013; and

• A R&D portfolio of more than 25 products in various stages of development, including 15 candidates in Women’s Health.

• The combined company will have the ability to grow through additional in-licensing opportunities within its key therapeutic categories.

• The combination will also provide the opportunity to introduce a broader portfolio

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of new products in Actavis’ expanded global footprint.

Financially Compelling

• The Directors of Actavis and Warner Chilcott believe that the combined company will have annual revenues of approximately $11 billion.

• The combination of Actavis and Warner Chilcott will result in Specialty Brand sales comprising approximately 25 per cent of total combined company 2013 revenues, when compared to approximately 7 per cent for standalone Actavis.

• The transaction is expected to be more than 30 per cent accretive to Actavis non-GAAP earnings per share in 2014, including anticipated synergies.

• More than $400 million in after-tax operational synergies and related cost reductions, and tax savings are anticipated2. The majority of savings are expected to be realized in 2014, with full effect during 2015. The majority of these are operational and this estimate excludes any revenue, manufacturing or interest rate synergies or savings.

Transaction Approval Process

The acquisition of Warner Chilcott by New Actavis will be effected by means of a “scheme of arrangement” under Irish law pursuant to which New Actavis will acquire all of the outstanding shares of Warner Chilcott from Warner Chilcott shareholders in exchange for shares to be issued by New Actavis (the “Acquisition”). The Acquisition will be subject to the terms and conditions to be set forth in the scheme of arrangement document to be delivered to Warner Chilcott shareholders.

To become effective, the scheme of arrangement will require, among other things, the approval of a majority in number of Warner Chilcott shareholders, present and voting either in person or by proxy at a special Warner Chilcott shareholder meeting, representing 75 per cent or more in value of Warner Chilcott shares held by such holders. Following the requisite Warner Chilcott shareholder approval being obtained, the sanction of the Irish High Court is also required.

In addition, the transaction must be approved in a special meeting by shareholders holding a majority of the outstanding Actavis common shares. The transaction, which is unanimously recommended by the Boards of Directors of both companies, is also subject to receipt of certain regulatory approvals and certain other conditions, as more particularly set out in Appendix III of this announcement.

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16. Following the Proposed Transaction, Actavis stockholders are expected to own

approximately 77% of the New Actavis ordinary shares and Warner Chilcott shareholders are

expected to own approximately 23% of the New Actavis ordinary shares.

III. THE MATERIALLY MISLEADING REGISTRATION STATEMENT

17. On June 18, 2013, the Registration Statement, including the preliminary joint

proxy/prospectus of Warner Chilcott and Actavis, was filed with the SEC containing significant

material omissions that must be disclosed to Warner Chilcott’s public shareholders so that they

receive complete and accurate information about the Proposed Transaction and can decide

whether to vote in favor of the Proposed Transaction. The Registration Statement omits material

information concerning: (a) the background of the Proposed Transaction; (b) key management

projections; (c) the financial analysis of Warner Chilcott’s financial advisor, Deutsche Bank; (d)

the financial analyses of Actavis’s financial advisors, BofA Merrill Lynch and Greenhill; and (e)

potential conflicts of interest of the respective financial advisors.

1. The Registration Statement Fails to Adequately Describe the Background That Resulted in the Proposed Transaction

18. The Registration Statement fails to fully and fairly disclose certain material

information concerning the Proposed Transaction, including (among other things):

a. On page 54, the Registration Statement states that as part of an ongoing evaluation

process, from time to time representatives of Warner Chilcott and Actavis had

discussed each others businesses and potential opportunities to explore business

combinations. The Registration Statement fails to disclose when these discussions

occurred, what was discussed and considered, what types of combinations were

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contemplated, and what conclusions were reached. These omissions are material

because, among other reasons, without the omitted information, Warner Chilcott’s

public shareholders are unable to assess whether the Proposed Transaction is fair

and reasonable and in the best interests of Warner Chilcott and its shareholders as

“determined” by the Board and whether they should vote in favor of the Proposed

Transaction.

b. On page 54, the Registration Statement states that in early 2012, Warner Chilcott

initiated a process to explore a broad range of potential strategic alternatives to

enhance shareholder value, and engaged in preliminary discussions with 12

potential offerors, including Actavis. The Registration Statement fails to disclose

the duration of this process, or any details about the strategic alternatives explored

by the Company. These omissions are material because among other reasons,

without the omitted information, Warner Chilcott’s public shareholders are unable

to assess whether the Proposed Transaction is fair and reasonable and in the best

interests of Warner Chilcott and its shareholders as “determined” by the Board and

whether they should vote in favor of the Proposed Transaction.

c. On page 54, the Registration Statement states that in early 2012, Warner Chilcott


enhance shareholder value, and engaged in preliminary discussions with twelve

potential offerors, including Actavis. The Registration Statement fails to disclose

information concerning the discussions with the twelve potential offerors

including, how many of these twelve offerors were strategic buyers and how many

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were financial buyers; how many companies were initially contacted during this

process; and, other than Actavis, how many of the companies signed

confidentiality agreements with Warner Chilcott during this process or the terms of

any such agreement, including whether they contained standstill provisions. These

omissions are material because, among other reasons, without the omitted

information Warner Chilcott’s public shareholders are unable to assess whether the

Proposed Transaction is fair and reasonable and in the best interests of Warner

Chilcott and its shareholders as “determined” by the Board and whether they

should vote in favor of the Proposed Transaction.

d. On page 54, the Registration Statement states that in early 2012, Warner Chilcott

received two preliminary, non-binding indications of interest, with the prices

ranging from $20.00 to $22.50 per share, and $22.00 to $24.00 per share. The

Registration Statement fails to disclose the respective premiums that each offer

represented on Warner Chilcott’s trading price. The Registration Statement also

fails to disclose what further negotiations, if any, occurred between Warner

Chilcott and each of these two preliminary bidders, particularly since Warner

Chilcott ultimately agreed to a transaction that had an implied value of $20.08 per

Warner Chilcott share. These omissions are material because, among other reasons,

without the omitted information Warner Chilcott’s public shareholders are unable

to assess whether the Proposed Transaction is fair and reasonable and in the best

interests of Warner Chilcott and its shareholders as “determined” by the Board and

whether they should vote in favor of the Proposed Transaction.

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e. On page 54, the Registration Statement states that in early 2012, Warner Chilcott


enhance shareholder value, and engaged in preliminary discussions with 12

potential offerors, but that this process did not result in any business combination.

The Registration Statement fails to disclose the reasons that the process did not

result in any business combination, particularly since Warner Chilcott ultimately

agreed to a transaction that had an implied value of $20.08 per Warner Chilcott

share, despite having received initial indications of interest ranging from $20.00 to

$22.50 per share and $22.00 to $24.00 per share. This omission is material

because, among other reasons, without the omitted information Warner Chilcott’s




Transaction.

f. On page 54, the Registration Statement states that in April and May 2013, Actavis

was presented with certain strategic opportunities and engaged in preliminary

discussions with third parties but ultimately determined that these strategic

alternatives were not in the best interests of its shareholders. The Registration

Statement fails to disclose how many third parties expressed an interest in a

strategic opportunity with Actavis, whether any of these third parties signed

confidentiality agreements with Actavis, and whether any of these third parties

submitted an indication of interest, and if so, the price range reflected in the

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indication of interest. The Registration Statement also fails to disclose the reasons

that Actavis determined not to pursue a strategic alternative. These omissions are

material because, among other reasons, without the omitted information Warner

Chilcott’s public shareholders are unable to assess whether the Proposed

Transaction is fair and reasonable and in the best interests of Warner Chilcott and

its shareholders as “determined” by the Board and whether they should vote in


g. On page 54, the Registration Statement states that on May 3, 2013, “in response to

an earlier telephone call” from the Chief Executive Officer of Warner Chilcott, the

Chief Executive Officers of Warner Chilcott and Actavis discussed a possible

acquisition of Warner Chilcott by Actavis. The Registration Statement fails to

disclose any details relating to this phone call such as why the initial call was

made, whether it was first discussed with Warner Chilcott’s board of directors, or

whether any other companies were being called. This omission is material because,

among other reasons, without the omitted information Warner Chilcott’s public

shareholders are unable to assess whether the Proposed Transaction is fair and

reasonable and in the best interests of Warner Chilcott and its shareholders as


Transaction.

h. On page 54, the Registration Statement states that there was an existing

confidentiality agreement in place between Actavis and Warner Chilcott, dating

back to Warner Chilcott’s exploration of strategic alternatives “in early 2012.” The

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Registration Statement fails to disclose the date that the parties signed the

confidentiality agreement, the terms of the confidentiality agreement, how far

negotiations between the parties progressed after the signing of the confidentiality

agreement, or the reasons that the negotiations ultimately did not progress to a

business combination after signing the confidentiality agreement. These omissions

are material because, among other reasons, without the omitted information

Warner Chilcott’s public shareholders are unable to assess whether the Proposed

Transaction is fair and reasonable and in the best interests of Warner Chilcott and

its shareholders as “determined” by the Board and whether they should vote in


i. On page 54, the Registration Statement states that on May 4 and May 5, 2013,

Actavis and Warner Chilcott engaged in preliminary discussions regarding the

potential strategic synergies that might result from the combination of the two

companies and instructed their respective advisors to explore potential transaction

structures, including a stock-for-stock acquisition of Warner Chilcott by Actavis.

The Registration Statement fails to disclose whether the respective advisors were

asked to identify any other possible deal partners, or the nature of the explored

potential transaction structures, other than a stock-for-stock acquisition. These

omissions are material because, among other reasons, without the omitted




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should vote in favor of the Proposed Transaction. On page 56, the Registration

Statement states that on May 13, 2013, the CEOs of Warner Chilcott and Actavis,

as well as other officers of the respective companies, met to discuss “preliminary

issues” with respect to a potential acquisition. The Registration Statement fails to

disclose the nature and substance of these preliminary issues, or whether they were

the same or differed from the “preliminary issues” discussed on May 5, 2013. This

omission is material because, among other reasons, without the omitted




should vote in favor of the Proposed Transaction. .

j. On page 56, the Registration Statement states that Actavis’ Board of Directors

discussed a potentially acceptable range of exchange ratios. The Registration

Statement fails to disclose this range of exchange ratios. This omission is material





Transaction.

k. On page 56, the Registration Statement states that Actavis’ CEO did not believe it

was appropriate to offer a premium to Warner Chilcott’s stock price. The

Registration Statement fails to disclose the reasons that Actavis’ CEO did not

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believe the Proposed Transaction merited a premium. This omission is material





Transaction.

l. On page 56 and again on page 58, the Registration Statement states that Warner

Chilcott’s Board of Directors discussed the potential opportunities presented by a

transaction with Actavis and the risks of associated with continuing the business on

a standalone basis. The Registration Statement fails to disclose any details

regarding these opportunities and risks. This omission is material because, among

other reasons, without the omitted information Warner Chilcott’s public

shareholders are unable to assess whether the Proposed Transaction is fair and

reasonable and in the best interests of Warner Chilcott and its shareholders as


Transaction.

m. On page 57, the Registration Statement states that on May 14, 2013, at a special

telephonic meeting of the Board of Directors of Warner Chilcott, the Board

considered whether they should solicit alternative proposals from other parties and

that the board concluded that it was unlikely that a third party would make an offer

superior to Activas’. The Registration Statement fails to disclose the data or basis

for the Board’s evaluation of the relative potential operational cost efficiencies and

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incremental revenue opportunities of the Activas transaction and how that

supported its conclusion that it was unlikely that a third party would make an offer

superior, or whether they made that evaluation with the assistance of their financial

analysts. The Registration Statement also states that the Board’s conclusion was

based on the results of the strategic review process that was undertaken in 2012,

but fails to disclose any details relating to that process. See supra b-e. These

omissions are material because, among other reasons without the omitted




should vote in favor of the Proposed Transaction.

19. Since Defendants will seek shareholder approval of the Proposed Transaction, they

have a duty to disclose fully and fairly all material details of the sales process, including those set

forth above. Shareholders are entitled to know, before voting, the details that led to the Board’s

decision to sell the Company and the basis of the Board’s determination that the Proposed

Transaction is fair..

2. The Registration Statement Fails to Disclose Material Facts Concerning Management Projections

20. On page 62, the Registration Statement lists various factors that the Board believes

support its determination that the Proposed Transaction is fair to Warner Chilcott shareholders.

These factors include the “expected synergies of the transaction.” Moreover, on pages 73 and 81,

respectively, the Registration Statement states that BofA Merrill Lynch and Greenhill reviewed

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those synergies in connection with rendering their fairness opinions. In fact, the synergies

projected by Warner Chilcott’s management are referenced approximately 70 times in the

Registration Statement (including over 20 times in the financial analysis section). However, the

Registration Statement fails to disclose the details of those synergies, including the projections,

data, and analysis that support, establish and explain the nature of those synergies. This omission

is material because the referenced synergies, were considered in connection with, and formed the

basis of, the fairness opinions issued by the various financial advisors, as well as the opinions and

recommendations of the board of directors of Warner Chilcott. Without the omitted information,

Warner Chilcott’s public shareholders are unable to determine what weight, if any, to place on the

fairness opinions and recommendations in determining how to vote on the Proposed Transaction.

3. The Registration Statement Fails to Disclose Material Facts Concerning Deutsche Bank’s Analyses and Fairness Opinion

21. In the Registration Statement, Deutsche Bank describes its fairness opinion and the

various valuation analyses it performed in support of its opinion. However, the description of

Deutsche Bank’s opinion and analyses fails to include key inputs and assumptions underlying the

analyses. Without this information, as described below, Warner Chilcott’s public shareholders are

unable to fully understand the analyses and, thus, are unable to determine what weight, if any, to

place on the fairness opinion in determining how to vote on the Proposed Transaction.

22. In contrast to Actavis’s analysts, the Registration Statement fails to disclose

whether Deutsche Bank considered the “synergies” in its analysis of the Proposed Transaction.

Moreover, both BofA Merrill Lynch and Greenhill performed Value Creation Analysis based on

Discounted Cash Flows and Trading Multiples in order to determine the implied gain in equity

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value to Actavis’s shareholders resulting from the Proposed Transactions. According to the

Registration Statement, the results of that analysis, which incorporated the “synergies”, yielded an

implied gain in equity value to Actavis shareholders of between 8.0% - 52.0%. However, the

Registration Statement fails to disclose whether Deutsche Bank performed such an analysis, the

nature of it findings, and the impact of the same on its “fairness opinion.” These omissions are

highly material because without this information, Warner Chilcott’s public shareholders are

unable to fully understand the analysis and, thus, are unable to determine what weight, if any, to


Public Trading Comparables Analysis - Warner Chilcott (pages 92-93)

23. The Registration Statement fails to disclose material details concerning Deutsche

Bank’s Public Trading Comparables Analysis - Warner Chilcott. The Registration Statement fails

to disclose the multiples for total enterprise value to EBITDA for 2013 and 2014, and for price to

estimated earnings for 2013 and 2014 that Deutsche Bank observed for each of the selected public

companies. This omission is material because without this information, Warner Chilcott’s public

shareholders are unable to fully understand the analysis and, thus, are unable to determine what

weight, if any, to place on the fairness opinion in determining how to vote on the Proposed

Transaction.

24. The Registration Statement fails to disclose the total enterprise value for each of

the five publicly traded companies observed. This omission is material because without this

information, Warner Chilcott’s public shareholders are unable to fully understand the analysis

and, thus, are unable to determine what weight, if any, to place on the fairness opinion in

determining how to vote on the Proposed Transaction.

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Public Trading Comparables Analysis - Actavis (pages 93-94)


Bank’s Public Trading Comparables Analysis - Actavis . The Registration Statement fails to

disclose the multiples for total enterprise value to EBITDA for 2013 and 2014, and for price to

estimated earnings for 2013 and 2014 that Deutsche Bank observed for each of the selected public

companies. This omission is material because without this information, Warner Chilcott’s public



Transaction.

26. The Registration Statement fails to disclose the total enterprise value for each of

the four publicly traded companies observed. This omission is material because without this




Discounted Cash Flow Analysis - Warner Chilcott (page 95)


Bank’s Discounted Cash Flow Analysis - Warner Chilcott . The Registration Statement fails to

disclose the inputs and assumptions used to arrive at discount rates ranging from 8.0% to 10.0%.

This omission is material because without this information, Warner Chilcott’s public shareholders

are unable to fully understand the analysis and, thus, are unable to determine what weight, if any,

to place on the fairness opinion in determining how to vote on the Proposed Transaction.

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Discounted Cash Flow Analysis - Actavis (page 95)


Bank’s Discounted Cash Flow Analysis - Actavis . The Registration Statement fails to disclose the

inputs and assumptions used to arrive at discount rates ranging from 7.0% to 9.0%. This omission

is material because without this information, Warner Chilcott’s public shareholders are unable to

fully understand the analysis and, thus, are unable to determine what weight, if any, to place on

the fairness opinion in determining how to vote on the Proposed Transaction.

Additional Valuation Analyses - Warner Chilcott (Analysts Price Targets) (page 95)


Bank’s Analysts Price Targets analysis for Warner Chilcott. The Registration Statement fails to

disclose the full list of analyst price targets that were reviewed by Deutsche Bank. This omission

is material because without this information, Warner Chilcott’s public shareholders are unable to



Additional Valuation Analyses - Warner Chilcott (Precedent Transaction Analysis) (pages 95-96)


Bank’s Precedent Transactions Analysis. The Registration Statement fails to disclose the values

for Total Enterprise Value / LTM EBITDA that were observed for each of the selected

transactions. The Registration Statement also fails to disclose the total enterprise value of each

transaction, the purchase consideration (cash or stock), and the transaction type (public or private

transaction) for each of the selected transactions. These omissions are material because without

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this information, Warner Chilcott’s public shareholders are unable to fully understand the analysis



31. The Registration Statement fails to disclose the reasons that Deutsche Bank

selected only those transactions occurring after September 2008. This omission is material

because without this information, Warner Chilcott’s public shareholders are unable to fully

understand the analysis and, thus, are unable to determine what weight, if any, to place on the

fairness opinion in determining how to vote on the Proposed Transaction.

32. The Registration Statement fails to disclose the criteria used to select each of the

11 precedent transactions. This omission is material because without this information, Warner

Chilcott’s public shareholders are unable to fully understand the analysis and, thus, are unable to

determine what weight, if any, to place on the fairness opinion in determining how to vote on the

Proposed Transaction.

Additional Valuation Analyses - Actavis (Analysts Price Targets) (page 96)


Bank’s Analysts Price Targets analysis for Actavis. The Registration Statement fails to disclose

the full list of analyst price targets that were reviewed by Deutsche Bank. This omission is

material because without this information, Warner Chilcott’s public shareholders are unable to



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Additional Valuation Analyses - Warner Chilcott (Transaction Premia Analysis) (page 97)


Bank’s Transaction Premia Analysis. The Registration Statement fails to disclose the 19

premium transactions that were observed in this analysis. The Registration Statement also fails to

disclose the premium observed for each transaction, the total enterprise value of each transaction,

and the transaction type (public or private transaction) for each of the selected transactions.

Moreover, the Registration Statement failed to disclose whether Deutsche Bank relied on the

“unaffected” prices (ie. the stock prices of the targets and acquirers on the day prior to the

announcement of the respective transaction) or the post-announcement prices of the companies it

analyzed in the premium transactions. Additionally, the Registration Statement fails to disclose

Deutsche Bank’s valuation of the proposed exchange ratio for the Proposed Transaction in light of

the anaylsis. These omissions are material because without this information, Warner Chilcott’s

public shareholders are unable to fully understand the analysis and, thus, are unable to determine

what weight, if any, to place on the fairness opinion in determining how to vote on the Proposed

Transaction. Additionally, without the omitted information, the analysis is deceptive and

meaningless since Deutsche Bank noted that, of the 19 selected premium transactions, four had

premia in a range, corresponding to the premium to be paid in the transaction based on the

unaffected price of the Actavis shares, and seven had premia in a range, corresponding to the

premium to be paid in the transaction based on the Actavis share price as of May 17, 2013, yet it

failed to disclose whether the prices used in the premium transactions were “unaffected” or post

announcement.

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Additional Valuation Analyses - Warner Chilcott (Illustrative Accretion/Dilution Analysis) (page 97)

35. The Registration Statement fails to disclose whether the Proposed Transaction,

either with or without the “illustrative synergies” would be accretive or dilutive to Warner

Chilcott’s public shareholders. The Registration Statement also fails to disclose the relative

impact of the anticipated accretive earnings to Actavis shareholders (which, according to

Deutsche Bank may range from 24.5% to 35.2%) to Deutsche Bank’s valuation of the proposed

exchange ratio for the Proposed Transaction. These omissions are material because without this




4. The Registration Statement Fails to Disclose Material Facts Concerning BofA Merrill Lynch’s Analyses and Fairness Opinion

36. In the Registration Statement, BofA Merrill Lynch describes its fairness opinion

and the various valuation analyses it performed in support of its opinion. However, the description

of BofA Merrill Lynch’s opinion and analyses fails to include key inputs and assumptions

underlying the analyses. Without this information, as described below, Warner Chilcott’s public

shareholders are unable to fully understand the analyses and, thus, are unable to determine what


Transaction.

Selected Publicly Traded Companies Analysis (pages 74-76)

37. The Registration Statement fails to disclose material details concerning BofA

Merrill Lynch’s Selected Publicly Traded Companies Analysis . The Registration Statement fails

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to disclose the values for per share equity values as a multiple of 2013 and 2014 estimated

earnings per share and for enterprise values as a multiple of 2013E adjusted EBITDA and 2014E

adjusted EBITDA that was observed for each of the seven selected companies. This omission is

material because without this information, Warner Chilcott’s public shareholders are unable to



38. The Registration Statement fails to disclose the reasons for selecting publicly

traded companies in the generic pharmaceuticals industry, for Actavis, particularly where the

Selected Precedent Transactions Analysis looked to companies in the broader pharmaceutical

industry. This omission is material because without this information, Warner Chilcott’s public



Transaction.

39. The Registration Statement fails to disclose the values for per share equity values

as a multiple of 2013 and 2014 estimated earnings per share and for enterprise values as a

multiple of 2013E adjusted EBITDA and 2014E adjusted EBITDA that was observed for each of

the six selected companies. This omission is material because without this information, Warner




40. The Registration Statement fails to disclose the enterprise value for each of the

seven publicly traded companies observed in the Warner Chilcott analysis and for each of the six

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publicly traded companies observed in the Actavis analysis. This omission is material because

without this information, Warner Chilcott’s public shareholders are unable to fully understand the

analysis and, thus, are unable to determine what weight, if any, to place on the fairness opinion in


Selected Precedent Transactions Analysis (pages 76-77)


Merrill Lynch’s Selected Precedent Transactions Analysis . The Registration Statement fails to

disclose the values for Enterprise Value / LTM EBITDA that was observed for each of the

selected transactions. The Registration Statement also fails to disclose the enterprise value of each

transaction, the purchase consideration (cash or stock), and the transaction type (public or private

transaction) for each of the selected transactions. These omissions are material because without




Discounted Cash Flow Analysis (pages 77-78)


Merrill Lynch’s Discounted Cash Flow Analysis . The Registration Statement fails to disclose the

inputs and assumptions used to arrive at a perpetuity growth rate of negative 2.5% to negative

0.5% and used to arrive at discount rates ranging from 8.0% to 10.0% for Warner Chilcott. This

omission is material because without this information, Warner Chilcott’s public shareholders are

unable to fully understand the analysis and, thus, are unable to determine what weight, if any, to


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43. The Registration Statement fails to disclose the inputs and assumptions used to

arrive at a perpetuity growth rate of 0.0% to 1.0% and used to arrive at discount rates ranging

from 6.5% to 8.0% for Actavis. This omission is material because without this information,

Warner Chilcott’s public shareholders are unable to fully understand the analysis and, thus, are

unable to determine what weight, if any, to place on the fairness opinion in determining how to

vote on the Proposed Transaction.

Value Creation Analysis Based on Discounted Cash Flow (page 78)


Merrill Lynch’s Value Creation Analysis Based on Discounted Cash Flow . The Registration

Statement fails to disclose the inputs and assumptions used to arrive at each of the perpetuity

growth rates and discount rates used in BofA Merrill Lynch’s analysis. This omission is material

because without this information, Warner Chilcott’s public shareholders are unable to fully

understand the analysis and, thus, are unable to determine what weight, if any, to place on the

fairness opinion in determining how to vote on the Proposed Transaction.

Other Factors (page 79)

45. The Registration Statement fails to disclose the full list of analyst price targets that

were reviewed by BofA Merrill Lynch. This omission is material because without this




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5. The Registration Statement Fails to Disclose Material Facts Concerning Greenhill’s Analyses and Fairness Opinion

46. In the Registration Statement, Greenhill describes its fairness opinion and the

various valuation analyses it performed in support of its opinion. However, the description of

Greenhill’s opinion and analyses fails to include key inputs and assumptions underlying the

analyses. Without this information, as described below, Warner Chilcott’s public shareholders are

unable to fully understand the analyses and, thus, are unable to determine what weight, if any, to


Selected Company Analysis (pages 82-84)

47. The Registration Statement fails to disclose material details concerning Greenhill’s

Selected Company Analysis . The Registration Statement fails to disclose the multiples for

enterprise value to EBITDA for 2013 and 2014, and for price to earnings that Greenhill observed

for each of the selected public companies. This omission is material because without this




48. The Registration Statement fails to disclose the enterprise value for each of the

nine publicly traded companies observed. This omission is material because without this




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Discounted Cash Flow Analysis (page 84)


Discounted Cash Flow Analysis . The Registration Statement fails to disclose the inputs and

assumptions used to arrive at a perpetuity growth rate of negative 3.0% to negative 1.0% and used

to arrive at discount rates ranging from 8.0% to 9.0%. This omission is material because without




Precedent Transactions Analysis (pages 84-85)


Precedent Transactions Analysis. The Registration Statement fails to disclose the values for

Transaction Value / LTM EBITDA that was observed for each of the selected transactions. The

Registration Statement also fails to disclose the enterprise value of each transaction, the purchase

consideration (cash or stock), and the transaction type (public or private transaction) for each of

the selected transactions. These omissions are material because without this information, Warner




51. The Registration Statement fails to disclose the reasons that Greenhill only selected

those transactions that occurred after November 2007. This omission is material because without


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Premiums Paid Analysis (pages 85-86)


Premiums Paid Analysis . The Registration Statement fails to disclose which companies’

premiums were impacted by abnormal price movements. This omission is material because

without this information, Warner Chilcott’s public shareholders are unable to fully understand the

analysis and, thus, are unable to determine what weight, if any, to place on the fairness opinion in


53. The Registration Statement fails to disclose the premiums observed for each of the

16 selected transactions. This omission is material because without this information, Warner




Value Creation Analysis Based on Discounted Cash Flow (pages 86-87)


Value Creation Analysis Based on Discounted Cash Flow . The Registration Statement fails to

disclose the inputs and assumptions used to arrive at each of the perpetuity growth rates and

discount rates used in Greenhill’s analysis. This omission is material because without this




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6. The Registration Statement Fails to Provide Adequate Information Concerning the Financial Advisors

55. Actavis’ financial advisors, BofA Merrill Lynch and Greenhill, were each retained

to render an opinion that the merger price is fair to the shareholders, and to perform the valuation

analysis necessary to support that opinion. In light of the materiality of the opinion and analysis to

the market and Warner Chilcott’s shareholders, it is critical to know any facts that might suggest

that the financial advisors are conflicted, including the extent of any contingent fee arrangements

and previous or current work for any party. The Registration Statement is materially misleading

and/or incomplete for failing to disclose the work that either BofA Merrill Lynch or Greenhill

have done for Actavis and Warner Chilcott, and any of their related or affiliated organizations,

over the last two years, and what fees they have been paid for this work. These omissions are

material. Providing the omitted information to shareholders will help them assess whether BofA

Merrill Lynch or Greenhill were conflicted in rendering their fairness opinions.

* * *

56. It is clear that there are significant material omissions in the Registration Statement

filed with the SEC on June 18, 2013 that prevent shareholders from making an informed decision

about whether or not to vote for the Proposed Transaction.

CAUSE OF ACTION (Violation of §14 of the Exchange Act)

57. Plaintiff repeats and realleges each allegation set forth herein.

58. Warner Chilcott has caused the Registration Statement to be issued with material

omissions and misleading statements.

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59. The Registration Statement is an essential link in the accomplishment of the


60. In the exercise of reasonable care, Warner Chilcott should have known that the

Registration Statement is materially misleading and omits material facts that are necessary to

render them non-misleading.

61. The misrepresentations and omissions in the Registration Statement are material to

Plaintiff, and Plaintiff will be deprived of his right to make a fully informed decision if such

misrepresentations and omissions are not corrected prior to the vote by shareholders.

PRAYER FOR RELIEF

WHEREFORE , Plaintiff demands relief in his favor and against Defendant as follows:

A. Declaring that this action is properly maintainable as a Class action and certifying

Plaintiff as Class representative;

B. Enjoining Defendant, its agents, counsel, employees and all persons acting in

concert with it from consummating the Proposed Transaction, unless and until the Company

discloses all material information to shareholders in connection with the Proposed Transaction;

C. Rescinding, to the extent already implemented, the Proposed Transaction or any of

the terms thereof, or granting Plaintiff rescissory damages;

D. Directing the Defendant to account to Plaintiff for all damages suffered as a result

of the wrongdoing;

E. Declaring that the Registration Statement is materially misleading and contains

omissions of material fact in violation of Section 14 of the Exchange Act and Rule 14

promulgated thereunder;

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F. Awarding compensatory damages in favor of Plaintiff against Defendant for all

losses and damages suffered as a result of Defendant’s wrongdoing alleged herein, in an amount

to be determined at trial, together with interest thereon;

G. Awarding Plaintiff the costs and disbursements of this action, including reasonable

attorneys’ and experts’ fees; and

H. Granting such other and further equitable relief as this Court may deem just and

proper.

JURY DEMAND

Plaintiff demands a jury on all issues triable before a jury.

Dated: July 29, 2013

Respectfully submitted,

By: /s/ Marc L. Ackerman Evan J. Smith Marc L. Ackerman Two Bala Plaza, Suite 602 Bala Cynwyd, PA 19004 610.667.6200 610.667.9029 (fax)

Counsel for Plaintiff

Of Counsel:

BROWER PIVEN A Professional Corporation Brian C. Kerr 475 Park Avenue, 33rd Floor New York, NY 10016 Tel: (212) 501-9000 Fax: (212) 501-0300

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