United States District Court, N.D. Illinois, Eastern Division
WALLEYE TRADING LLC, individually and on behalf of all others similarly situated Plaintiff,
v.
ABBVIE, INC. and WILLIAM J. CHASE, Defendants.
ORDER
CHARLES P. KOCORAS, UNITED STATES DISTRICT JUDGE
Before
the Court are AbbVie, Inc., and William J. Chase’s
(collectively, “Defendants”) on a motion to
dismiss Plaintiff Walleye Trading LLC’s
(“Walleye”) First Amended Class Action Complaint
under Federal Rule of Civil Procedure 12(b)(6). For the
following reasons, the Court grants the motion.
STATEMENT
For
purposes of this motion, the Court accepts as true the
following facts from the amended complaint. Murphy v.
Walker, 51 F.3d 714, 717 (7th Cir. 1995). All reasonable
inferences are drawn in Walleye’s favor. Tamayo v.
Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).
AbbVie
conducted a modified Dutch Auction (“Auction”) to
repurchase $7.5 billion of its common stock.[1] It set a tender
range between $99-$114 per share (in $1.00 increments).
AbbVie engaged Computershare as the depositary to facilitate
the Auction.[2] Computershare and AbbVie communicated
daily regarding the tender process.
The
Auction began on May 1, 2018 and continued until midnight on
May 29, 2018. At 8 a.m. EST on May 30, 2018, AbbVie issued a
SCHEDULE TO (Amendment No. 7) Tender Offer Statement
announcing the Auction’s preliminary results. As
relevant, the accompanying press release stated:
NORTH CHICAGO, Ill., May 30, 2018 /PRNewswire/-AbbVie (NYSE:
ABBV) today announced the preliminary results of its modified
Dutch Auction tender offer, which expired at 12:00 midnight,
New York City time, at the end of May 29, 2018. Based on the
preliminary count by Computershare Trust Company, N.A., the
depositary for the tender offer, a total of 75, 743, 313
shares of AbbVie’s common stock, $0.01 par value per
share, were properly tendered and not properly withdrawn at
or below the purchase price of $105 per share, including 49,
129, 844 shares that were tendered by notice of guaranteed
delivery. AbbVie has been informed by the depositary that the
preliminary proration factor for the tender offer is
approximately 94.3 percent. In accordance with the terms and
conditions of the tender offer, and based on the preliminary
count by the depositary, AbbVie expects to acquire
approximately 71.4 million shares of its common stock at a
price of $105 per share, for an aggregate cost of
approximately $7.5 billion, excluding fees and expenses
relating to the tender offer. These shares represent
approximately 4.5 percent of the shares outstanding. . . .
Once
AbbVie announced that its purchase price would be $105, its
stock rose 3.5% from its May 29, 2018 closing price of
$99.47, closing at $103.01 on May 30, 2018, with a trading
volume of more than 31 million shares.
Forty-six
minutes after the market closed on May 30, AbbVie filed a
Corrected SCHEDULE TO Tender Offer Statement. The
accompanying press release stated:
NORTH CHICAGO, Ill., May 30, 2018 /PRNewswire/–AbbVie
(NYSE: ABBV) today announced the preliminary results of its
modified Dutch Auction tender offer, which expired at 12:00
midnight, New York City time, at the end of May 29, 2018.
This update replaces the preliminary results announced at
8:00 a.m., New York City time, on May 30, 2018. This update
reflects additional shares that were validly tendered by
notice of guaranteed delivery, but that were erroneously
omitted from the initial preliminary results provided to
AbbVie by Computershare Trust Company, N.A., the depositary
for the tender offer. Final results of the tender offer will
be issued no later than June 4, 2018 following the expiration
of the notice of guaranteed delivery period. Based on the
updated preliminary count by Computershare Trust Company,
N.A., the depositary for the tender offer, a total of 74,
033, 457 shares of AbbVie’s common stock, $0.01 par
value per share, were properly tendered and not properly
withdrawn at or below the purchase price of $103 per share,
including 52, 915, 569 shares that were tendered by notice of
guaranteed delivery. AbbVie has been informed by the
depositary that the preliminary proration factor for the
tender offer is approximately 98.4 percent. In accordance
with the terms and conditions of the tender offer, and based
on the preliminary count by the depositary, AbbVie expects to
acquire approximately 72.8 million shares of its common stock
at a price of $103 per share, for an aggregate cost of
approximately $7.5 billion, excluding fees and expenses
relating to the tender offer. These shares represent
approximately 4.6 percent of the shares outstanding. . . .
In sum,
the updated press release showed that AbbVie’s initial
statement failed to account for approximately 5, 495, 581
shares, of which 3, 785, 725 were tendered by guaranteed
delivery, which led AbbVie to lower its purchase price from
$105 to $103. The next trading day, AbbVie stock traded down
sharply and closed at $98.94.
Walleye
brings this action under Federal Rules of Civil Procedure
23(a) and (b)(3) on behalf of all those who bought, or
otherwise transacted in AbbVie securities between 9:30 a.m.
and 4 p.m. EST on May 30, 2018 and were damaged thereby.
Walleye alleges three claims under the Exchange Act: Count I
alleges Defendants violated Section 14(e) of the Exchange
Act, 15 U.S.C. § 78n(e); Count II alleges that
Defendants violated Section 10(b) of the Exchange Act, 15
U.S.C. § 78j(b), and Rule10b-5; and Count III alleges
that Defendant William Chase (AbbVie’s CFO) violated
Section 20(a) of the Exchange Act. Defendants have moved to
dismiss the First Amended Complaint for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6).
LEGAL
STANDARD
A
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) “tests the sufficiency of the complaint, not
the merits of the case.” McReynolds v. Merrill
Lynch & Co., 694 F.3d 873, 878 (7th Cir. 2012). The
allegations in the complaint must set forth a “short
and plain statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). Plaintiffs
need not provide detailed factual allegations but must
provide enough ...