Gold Kist stands fast against Pilgrimís offer
Oct 18, 2006 10:13 AM, from staff and wire reports
Gold Kist Inc has responded to Pilgrimís Pride Corpís early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with Pilgrimís unsolicited offer to acquire Gold Kist common stock at $20 per share.
According to Gold Kist, early termination of the HSR waiting period has no effect on its lawsuit against Pilgrimís filed October 12 in the United States District Court for the Northern District of Georgia. In its lawsuit, Gold Kist asserts claims under Section 8 of the Clayton Act, as well as federal securities laws. The HSR Act review process does not address, or immunize a party from, violating Section 8 of the Clayton Act, or from a violation of any other antitrust or securities laws.
Section 8 of the Clayton Act prohibits officers and directors of companies of a certain size from sitting on a competitorís board of directors. The HSR Act, on the other hand, provides for agency review of potential acquisitions of a certain size to determine whether the transaction, if consummated, would violate Section 7 of the Clayton Act, which prohibits mergers or acquisitions that may substantially lessen competition.
Gold Kistís lawsuit alleges that Pilgrimís attempt to add nine of its own officers to the Gold Kist board of directors before any possible acquisition would, if successful, violate Section 8 of the Clayton Act. Gold Kist does not raise Section 7 claims in its lawsuit.
The Gold Kist board has rejected, as inadequate, Pilgrimís unsolicited tender offer and strongly recommends that its stockholders not tender their shares.
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