Court case against Moy Park acquisition to go ahead in US
A judge in the US state of Delaware has ruled that a lawsuit, against the acquisition of Moy Park by a multi-national chicken processor, will go ahead.
The case was taken by a group of minority stockholders of the buyer Pilgrim’s Pride, which is a subsidiary of Brazilian company JBS SA.
Moy Park was acquired by JBS back in 2015. However, in 2017, Moy Park was then bought (for $1.3 billion) by Pilgrim’s Pride – itself also owned by parent company JBS. However, Pilgrim’s Pride’s stockholders are arguing that the transaction was unfair.
The plaintiffs argue that JBS needed the acquisition to go ahead quickly in order to raise funds to pay off a $3.2 billion fine to the Brazilian government, following an investigation into bribery of politicians in that country.
They further claim that the negotiations that led to the acquisition of Moy Park were led by members of the Pilgrim’s Pride board who, they say, were not independent of JBS.
They argue that this resulted in Pilgrim’s Pride paying the price that JBS simply demanded in its opening ask, despite this apparently being “over” the value estimated by the internal analysis carried out by Pilgrim’s Pride.
In delivering his verdict on whether or not the case should proceed, the judge said: “The motions to dismiss the case are denied. Within 14 days, the parties shall submit a schedule to bring this case to trial.”