On Friday, poultry giant Tyson Foods was ordered by a Delaware Chancery Court judge to proceed with its US$4.7bn merger with IBP Inc. The surprise decision set in motion once again a deal aborted on 29 March, when Tyson unilaterally terminated its US$30 a share offer for the Dakota Dunes-based meatpacking firm amid allegations that IBP had improperly induced it into the deal by providing overly optimistic profit estimates, in its so-called Rawhide proxy.


Market analysts have admitted surprise that Vice Chancellor Leo E. Strine came down on IBP’s side during the nine-day trial, as the Springdale, Ark-based Tyson was initially expected to emerge triumphant from the case. He concluded however that Tyson must have realised that the projections were estimates because IBP did not usually make long-term earnings estimates and accepted IBP’s damaging testimony that proved Tyson officials were fully aware of the financial problems at an IBP subsidiary.


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