Orbital, Northrop Grumman Face Third Lawsuit This Month Over Proposed Merger

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Orbital ATK, Inc., its board of directors, Northrop Grumman Corporation, and Neptune Merger, Inc. have been hit with the third lawsuit filed this month regarding a potential merger between Orbital and Northrop Grumman. In the newest suit, an Orbital stockholder accuses the defendants of filing a “materially incomplete and misleading” proxy statement in connection with the transaction, claiming the statement was missing information concerning Orbital’s financial projections, its advisor’s valuation analyses, and the background of the sale.

In particular, the suit argues that Orbital’s board “allowed itself to be bulldozed by Northrop Grumman” and hastily agreed to a price that undervalues the company and offers stockholders “an unfair price for losing their investment.” The plaintiff says the board’s approval of the transaction is “troubling,” noting that Orbital executives could potentially receive a combined total of at least $42 million if the transaction is completed. The suit further claims that the proxy statement is notably silent about certain details of the merger’s background process, including who called the board meetings and the intention of their discussions.