Tyson Foods Completes Tender Offer for IBP

Poultry giant Tyson Foods Inc. said this weekend it had completed its tender offer for beef processor IBP Inc., bringing closer to fruition an exhaustive takeover bid that included temporary cancellation of the deal and shareholder lawsuits.

Tyson said Saturday that about 106.99 million shares, or 99.1%, of IBP common stock had been tendered by midnight Friday, when the tender offer expired. Tyson said it would purchase slightly more than half of IBP’s stock, or nearly 53.50 million shares, for about $30 a share.

The deal got the final go-ahead Friday, after a Delaware judge approved a modified settlement between the companies and shareholders who claimed the deal should have been worth more.

The decision by Vice Chancellor Leo Strine of the Delaware Chancery Court paved the way for Springdale, Ark.-based Tyson to proceed with the tender for IBP of Dakota Dunes, S.D., creating the largest U.S. meat company, with offerings in poultry, beef and pork.

During a hearing Friday, Strine refused to approve the settlement unless the companies revised it to preserve two federal lawsuits pending against them. The companies’ original proposal offered to settle 14 consolidated state suits and would have released the federal claims, filed in Delaware and South Dakota.

The state lawsuits alleged that IBP was not maximizing shareholder value in accepting the deal.

On Friday, IBP and Tyson agreed to pay $338,000 in legal fees to the attorneys representing those shareholders.

Tyson is expected to ask federal courts to dismiss the remaining suits. The South Dakota case alleges that IBP misled shareholders by withholding information that led to the restatement of IBP’s earnings, sending its shares lower. The Delaware suit claims that Tyson’s attempt to back out of the deal in March damaged investors who sold off IBP stock.

On Friday, Tyson shares closed at $10.66, up 27 cents, and IBP ended at $27.42, up 67 cents, in New York Stock Exchange Trading.