IBP appears to be heading for a morale boosting minor victory in its fight to force Tyson Foods to complete its US$3.2bn acquisition of the meat packer.
A hearing in Delaware by the court vice chancellor Leo Strine, rejected moves by Arkansas based Tyson to move the merger dispute hearings to that state. Strine denied Tyson’s petition to stay the Delaware action, finding the Arkansas and Delaware actions were “contemporaneously filed.”
The confusion over where the case will be heard relates to where and when both parties filed suits relating to the breakdown of the merger.
On 28 March, Tyson filed a suit to terminate its merger agreement with IBP in Arkansas. The very next day, IBP filed a suit against Tyson to force completion of the merger. Hearings on both claims are due to begin on 14 May in separate states, but Tyson had hoped that the court would dismiss the IBP action.
Strine said that a confidentiality agreement between IBP and Tyson in December last year required all disputes arising out of, or relating to, information stemming from a possible merger agreement to be litigated in Delaware. The judge therefore waved away Tyson’s insistence that the 1 January merger agreement superseded the December confidentiality agreement. The judge rejected an action from Tyson to dismiss the IBP suit against it.
Tyson withdrew its planned cash acquisition of IBP after a US Securities and Exchange Commission investigation revealed accounting irregularities at the meat packer.
To read Tyson’s press release on the litigation proceedings, click here.
To read IBP’s press release on the litigation proceedings, click here.