Perrigo plc , the largest maker of over-the-counter healthcare products, is at the center of a years-long legal dispute stemming from its rejection of a takeover bid and subsequent fallout that cost shareholders billions.

The case now includes a battle over whether one of its largest investors, Sculptor Fund, can belatedly remove itself from a related securities class action.

In April 2015, Mylan N.V., now part of Viatris Inc ( VTRS ). , a rival drugmaker at the time, made an unsolicited offer to acquire Perrigo ( PRGO ) for $205 per share, representing a 25% premium over the market price.

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Perrigo’s board urged shareholders to reject the bid, even as Mylan raised its offer twice, eventually reaching $246 per share. The board held firm, and by September 2015, Perrigo ( PRGO ) successfully fended off the tender offer.

However, in the process, Perrigo ( PRGO ) allegedly made misleading statements about its financial performance. Following the bid’s collapse, the company disclosed worse-than-expected earnings, significant asset impairment charges, and accounting errors totaling more than $1 billion, requiring restatements for all financial statements between April 2015 and May 2017.

Thomson Reuters published a copy of the lawsuit online on Tuesday.

Shares plunged more than 62%, prompting investors to sue.

In 2016, institutional investors filed a securities fraud class action. Sculptor, which owned roughly 5% of Perrigo’s shares during the period, filed its lawsuit in 2019 while class certification was still pending.

The class was certified later that year, and members had until December 2020 to opt out. Sculptor admits it received the opt-out notice but never submitted the required exclusion request.

Despite this oversight, Sculptor and Perrigo ( PRGO ) acted for years as though Sculptor had opted out. Perrigo ( PRGO ) listed Sculptor as an opt-out plaintiff in court filings, status reports, and SEC annual reports.

Sculptor participated in depositions and discovery as part of the supposed opt-out group. Neither side noticed the error until April 2024, when a proposed settlement required all class members pursuing individual claims to dismiss them.

When confronted with its omission, Sculptor sought to opt out nearly three and a half years late.

It argued that its independent lawsuit and related litigation activity showed a clear intent to opt out, warranting retroactive exclusion. Alternatively, it claimed “excusable neglect” and challenged the sufficiency of the class notice.

The court will now decide whether that argument holds, a ruling that could determine if Sculptor can continue pursuing its separate case or must instead accept the class settlement terms.

Last week, Perrigo ( PRGO ) reported second-quarter adjusted earnings of $0.57, below the consensus of $0.59. Sales of $1.06 billion were also below the Wall Street estimate of $1.08 billion.

Perrigo ( PRGO ) reaffirmed its fiscal 2025 adjusted earnings per share guidance of $2.90-$3.10, compared to the consensus of $3.04, and its sales guidance of $4.37 billion-$4.50 billion, compared to the consensus of $4.43 billion.

Price Action: PRGO stock is up 1.47% at $23.41 at the last check on Wednesday.

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