UPDATE 1-First Manhattan sues Vivus for shareholder meeting delay
July 16 (Reuters) - A proxy battle between Vivus Inc and its top investor intensified on Tuesday, when First Manhattan Co filed a lawsuit saying the directors of the obesity drugmaker illegally delayed its shareholder meeting to keep themselves in office.
In the lawsuit filed in the Delaware Court of Chancery, First Manhattan asked the court to stop Vivus and its representatives from soliciting proxies or votes for the annual meeting.
It also wants the inspector of elections to immediately certify results of the election of directors based upon the votes present and prepared to be voted at the originally scheduled July 15 annual meeting. That would mean votes coming in after July 15 would not be counted.
Vivus decided on Monday to postpone its shareholder meeting to July 18 from July 15, saying First Manhattan's advisers had made false statements to shareholders.. It declined to comment on the lawsuit.
"We have taken legal action against Vivus and the sitting board after their egregious attempt to disenfranchise Vivus' stockholders," Sam Colin, senior managing director at First Manhattan and a proposed Vivus director, said in a statement. "Vivus didn't like what it saw on the scoreboard so it decided to move the goal post."
First Manhattan, which holds about 9.9 percent of Vivus shares and has accused the company of bungling the launch and marketing of its Qsymia diet pill, has put up a full slate of nine proposed directors to try to gain control of the board. .
The investment advisory firm even took the unusual step earlier this month of announcing the name of a former AstraZeneca executive it planned to install as the next Vivus chief executive officer should it prevail in the proxy battle.
A settlement appeared possible over the weekend, when Vivus said it would invite three of First Manhattan's proposed directors to join its board. First Manhattan had said it was still in discussions with the company as late as Sunday, but they broke down after Vivus moved to delay the shareholder meeting.
Vivus shares were up 1.3 percent at $14.68 in late morning trading on Nasdaq - about half of their value at the time of the Qsymia approval a year ago.