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Earlier this week, the sale of Del Monte hit a bump when a Delaware judge postponed the sale for 20 days, or until March 7.
Why the delay? Vice-Chancellor J. Travis Laster of Delaware Chancery Court ruled that Del Monte’s board failed on two counts: The board let the adviser on the deal, Barclays Capital, provide financing to the would-be PE buyers, KKR, Vestar Capital and Centerview Partners; and it let allowed KKR to team up with Vestar, which previously made the high bid in an earlier phase of the process, according to Reuters.
The judge was particularly critical of Barclays, writing in his ruling: “Barclays secretly and selfishly manipulated the sale process to engineer a transaction that would permit Barclays to obtain lucrative buy-side financing fees.”
Barclays issued a statement saying that it “strongly disagrees with characterizations that are based on an incomplete factual record.”
While the judge hasn’t blocked the sale, he has enjoined Del Monte and its proposed PE buyers from enforcing a no-shop provision, which means Del Monte can search out higher offers. (KKR, Vestar and Centerview have offered $19 a share, or about $5 more per share than what the stock was trading for prior to their offer on Nov. 25.)
We at peHUB wonder if Del Monte should go on the block all over again. What do you think?