M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Thursday, November 25, 2010

Thanksgiving deal

Who announces a deal on Thanksgiving?!  Delmonte, it seems.  

´╗┐´╗┐Vestar Capital Partners and a fund run by Centerview partner James Kilts will join KKR in the deal, which ranks as one of the largest U.S. leveraged buyouts of the year. The three partners will assume about $1.3 billion in Del Monte's debt. When including the debt, the company said the deal value is $5.3 billion.

Del Monte can try to solicit high offers until Jan. 8, 2011 during a so-called "go shop" period. Del Monte said it expects the deal to close in March if it gets no higher bid.

The go-shop has nearly become a standard term over the past couple of years.  This development is a bit of a puzzle.  Sure, directors of sellers are likely afraid that they might face litigation if they don't so something to actively test the market.   There's something to that.  On the other hand, courts have -- particularly in recent years - been less demanding of selling directors.   There's no reason to believe that for a high profile transaction like this one that a no-shop with a fiduciary out wouldn't be sufficient.  Hey, don't get me wrong, I'm all for go-shops.   I just wonder whether there's more to them given that financial buyers who have always been averse to auctions are now willing to give go-shops without too much complaining any more. 

Now for more turkey.

-bjmq

http://lawprofessors.typepad.com/mergers/2010/11/thanksgiving-deal.html

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