Why winning bidder finance survives Del Monte

Author: Danielle Myles | Published: 26 Oct 2011

Settlement in Del Monte’s closely-watched shareholder litigation does not mark the end of stapled finance or winning bidder finance, but US counsel predict market expectation to shift away from banks working both sides of deals.

Earlier this month the company and its financial adviser agreed to an $89.4 million settlement of shareholder claims arising from Del Monte’s buyout led by KKR. Shareholders alleged the board breached its fiduciary duty in the way it allowed Barclays Capital, Del Monte’s financial adviser in the sale, to finance the deal.

The settlement amount, to be divided between Barclays and Del Monte, is one of the largest ever in Delaware shareholder litigation and follows a February court ruling where, in the course of granting an injunction on the sale, the court heavily...