A Delaware Chancery Court judge ruled that Tyson Foods Inc., the world's top poultry producer, cannot back out of its $4.7-billion acquisition of meat packer IBP Inc.
Vice Chancellor Leo E. Strine said he was not persuaded by Tyson's claims that it was kept in the dark about financial problems at an IBP subsidiary. He said Tyson "improperly terminated" its agreement with IBP and must go through with the deal. An appeal by Tyson is expected.
Springdale, Ark.-based Tyson announced plans to buy IBP for $3.2 billion on Jan. 2. It called off the deal in late March, alleging that IBP had provided misleading information about the company's worth.
The decision was issued after the close of the markets.
Shares of Dakota Dunes, S.D.-based IBP shot up 16.3% to $21.25 in extended trading, after closing the regular session down 23 cents at $18.27 on the New York Stock Exchange. Tyson shares fell 15% to $9.70 in after-hours trading, after closing down 5 cents at $11.38, also on the NYSE.