Del Monte Foods and Barclays agreed to pay $89 million to settle investor lawsuits over the buyout of Del Monte by a group of private equity firms led by KKR & Co.
Investors in Del Monte, led by the $646 million NECA-IBEW Pension Trust Fund, Decatur, Ill., will get at least 30 cents more a share to resolve claims they weren’t paid enough in the $19-a-share buyout, Stuart Grant, a lawyer for the investors, said Thursday in an interview.
“Del Monte has entered into the proposed settlement to eliminate the uncertainties, burden, and expense of further litigation,” the company said in an SEC filing. The companies denied any wrongdoing under the accord.
The settlement also resolves investors’ claims that Barclays, which served as Del Monte’s financial adviser while providing some financing for the buyers, had conflicting interests in the $5.3 billion deal. The private equity group led by KKR included Vestar Capital Partners and Centerview Partners.
Barclays was paid $24 million to advise Del Monte and as much as $24 million for providing loans to the buyers, according to investors’ suits filed in Delaware Chancery Court. The court must approve the accord before it becomes final.
“We are pleased that the parties have agreed to settle the litigation to avoid the expense, distraction and uncertainty of litigation,” Kerrie-Ann Cohen, a Barclays spokeswoman, said in an e-mailed statement. “We believe that the sale process leading up to the merger achieved the best price reasonably available for Del Monte stockholders.”
Kristi Huller, a KKR spokeswoman, and Chrissy Stengel, a Del Monte spokeswoman, both declined to comment.
In February, Delaware Chancery Court Judge Travis Laster ordered Del Monte to delay a shareholder vote on the deal so investors could consider whether to back it in light of disclosures about Barclays’ dual roles.
Randall Baron, attorney with law firm Robbins Geller Rudman & Dowd, which represented the pension fund, said in a statement that the settlement “delivers to Del Monte’s shareholders the added premium they rightly deserved.”
Del Monte will pay $66 million of the settlement, with the remainder paid by Barclays, according to the statement.