John Tyson, chairman of Tyson Foods, claimed in court yesterday that he is still interested in creating the world’s largest meat company, prompting much speculation that a merger with IBP Inc could still go ahead.
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Tyson testified in court that the original merger deal, which would have seen the poultry giant pay US$30 per share for the meat processor, was made under false pretences. He claimed that IBP breached its guarantee of its financial statements and that Tyson was right to terminate the deal on 29 March. IBP had to restate its financial reports for 2000 after an investigation by the Securities and Exchange Commission into accounting problems at its DFG Foods subsidiary.
Tyson was also in court to recover a US$66m fee his company had earlier paid to IBP.
South Dakota-based IBP had counter sued Tyson on 30 March, and appealed to the judge yesterday that Tyson be forced to honour its agreement to complete the merger, which was originally made on 1 January this year.
IBP’s financial projections were obviously pivotal to the deal, because Tyson based its offer on those figures. Tyson further argues that its inability to deal swiftly with DFG’s finances led to flagging trust between the companies.
Nevertheless, Tyson said yesterday “We would still consider the deal at the right value.”
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By GlobalData
