The Pillsbury Co. gave up its 21/2-month fight and agreed to a $5.68 billion takeover by British conglomerate Grand Metropolitan PLC, two days after major courtroom setbacks.
Grand Met will purchase all outstanding shares of Pillsbury common stock for $66 per share in cash, $3 higher than Grand Met's most recent tender offer, which was made last week."The shareholders got much, much more money than either the marketplace was offering or Pillsbury's restructuring offered," Karl Cambronne, a lawyer for dissident Pillsbury shareholders."I think the shareholders did well."
Lawyers, investment bankers and company officials worked out the deal's details Saturday and Sunday, and Pillsbury's board approved the deal Sunday afternoon.
On Friday, a judge in Delaware, where Pillsbury is incorporated, issued preliminary injunctions to invalidate Pillsbury's "poison pill" takeover defense and temporarily block the company's planned spinoff of its Burger King Corp. Grand Met requested the rulings.
Ruling in a separate lawsuit filed by dissident Pillsbury shareholders, a Minnesota judge also temporarily blocked the Burger King spinoff and said he probably would invalidate the "pill."
Pillsbury decided to deal because the "pill," its only bargaining chip, was gone, said Stephen Carnes, an analyst with Piper Jaffray & Hopwood in Minneapolis.
Pillsbury common stock was trading at $39 a share the day before Grand Met launched its $60-per-share hostile takeover bid Oct. 4. Pillsbury's stock closed at 621/4 Friday on the New York Stock Exchange.
"The price is fair," Carnes said.