Imperial Sugar Buyout Deal Not So Sweet, Shareholders Claim

Imperial Sugar Buyout Deal Not So Sweet, Shareholders Claim

By DEE MOORE 

          (CN) - Imperial Sugar shareholders don't think Louis Dreyfus Commodities' $6.35 per share buyout offer is a very sweet deal since the company's shares were trading well above the offer price in the recent past while analysts have pegged Imperial shares at as much as $20.
     Louis Dreyfus Commodities wants to buy ouststanding Imperial stock for $6.35 per share, a 57% premium on the closing price the day before the sale was announced, but plaintiff claims that the company is worth much more.
     The sugar company's stocks sold for $7.03 just two months before the sale was announced and one analyst has valued the stock as worth as much as $20 a share.
     The all cash sale will cost the buyers $203 million. The agreement requires LD Commodities to pick up the company's tab for any outstanding debt or pension liabilities. The sale was approved by a unanimous vote of the board who agreed to recommend that all shareholders sell their common stock holdings, the complaint states..
     "In approving the proposed acquisition, however, the individual defendants have breached their fiduciary duties of loyalty, good faith, due care and disclosure by, inter alia, agreeing to sell without first taking steps to ensure that plaintiff and class members would obtain adequate, fair and maximum consideration under the circumstances and locking up the proposed acquisition with deal protective mechanisms which ensures a rival bidder is not likely to emerge with the cards stacked so much in favor of LD Commodities."
     Imperial has had a financially difficult time recently. For the six-month period ending March 31, 2012, the Company reported a net loss of $10 million, or $0.83 per diluted share, compared to a net loss of $4.8 million, or $0.40 per diluted share, for the same period last year. The company announced that its fiscal quarter losses totaled $6.5 million.
     The class is represented by Michael Ridulfo Kane Russell Coleman & Logan in Houston and Evan Smith and Marc Ackerman of Brodsky & Smith LLC in Bala Cynwyd, Pa. 

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/05/10/338.htm