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IBP Sues Tyson to Force Completion of Merger

March 31, 2001|Reuters

Meat packing firm IBP Inc. filed a lawsuit seeking to force poultry giant Tyson Foods to honor the $3.2-billion merger agreement Tyson terminated. "Tyson's actions are completely unjustified by anything that has transpired and we will do what is necessary to protect our shareholders and our company," said Robert Peterson, IBP's chief executive. Tyson said late Thursday it terminated the agreement to acquire the Dakota Dunes, S.C.-based IBP because of "numerous breaches" of the merger agreement, including what it alleged was inadequate disclosure of the ongoing federal probe into accounting practices at IBP's DFG unit. In its lawsuit, IBP said it had provided Tyson officials with "routine and accurate updates of management's assessment of potential charges" related to the accounting problems. Shares of IBP plunged $6.39, or 28%, to close at $16.40, while Tyson rose $1.97 to close at $13.47, both on the NYSE.

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