LHC Group shareholder sues company over $5B UnitedHealth deal

A shareholder in LHC Group is suing the home healthcare provider and its board of directors over its planned merger with UnitedHealth Group's Optum.

UHG announced in March that it would acquire LHC in a deal valued at $5.4 billion. Both parties expect the deal to close in the second half of this year. Once the acquisition was announced, LHC issued a filing with the Securities and Exchange Commission that recommended its shareholders to vote in support of the deal.

In the lawsuit, filed earlier this month in New York federal court, shareholder David Schuppert claims that the filing was "misleading" as it did not fully disclose critical information. The proxy filing does not include "material information" on LHC's financial estimates, such as analyses conducted by the company's financial advisers and details on the sales process leading up to the deal.

"The disclosure of this information is material because it would provide the company’s shareholders with a basis to project the future financial performance of LHC Group and would allow shareholders to better understand the financial analyses performed by the company’s financial advisors in support of their fairness opinions," according to the suit.

"Shareholders cannot hope to replicate management’s inside view of the future prospects of the company," according to the suit.

Schuppert also argues that the company failed to include any potential conflicts of interest that could impact the deal in the proxy filing. The lawsuit alleges that these missing disclosures are in violation of the Securities and Exchange Act and seeks an injunction that would prevent the merger from moving forward until that information is released to shareholders.

Should the merger close, Schuppert may seek to recover rescissory damages, according to the suit.