February 20, 2011
I'm Shocked -- Shocked I tell you ....
Apparently, an investment bank has "secretly and selfishly manipulated" a sales process in order to obtain "lucrative" additional fees.
A Delaware judge has delayed a shareholder vote on Del Monte Foods Co.'s planned $4 billion acquisition by a group of private equity firms .... In a ruling dated Monday [Feb. 14], Vice Chancellor J. Travis Laster blasted Del Monte's financial adviser, Barclays Capital, saying the investment bank misled Del Monte's board ....
You can read more here.
Writes Steven Davidoff:
This opinion raises the ghost of the storied Macmillan management buyout. In 1989, the Delaware Supreme Court halted the buyout of the book publisher Macmillan because its management had worked with K.K.R. to take the company private by manipulating the bidding process behind the board’s back. . . . [W]hile Barclays’s actions appear egregious, this type of conduct has been under scrutiny for years. Investment banks too often try to steer takeover deals to private equity firms that can provide them additional fees.
Now watch this.