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Justice Department probes Del Monte sale for antitrust violations

November 28, 2011|Reuters

The Justice Department has opened a probe into the $4-billion takeover this year of Del Monte Corp. by private equity investors led by KKR & Co., according to court papers.

The department's antitrust division "has been investigating the facts and circumstances surrounding the sale of Del Monte," Stuart Grant, a lawyer for Del Monte shareholders, wrote in a Nov. 23 court filing. He said he had provided documents to the division and was cooperating with the investigation.

Calls to the Justice Department, KKR and Del Monte were not immediately returned. Del Monte and KKR have said that the Securities and Exchange Commission has issued subpoenas for documents relating to the buyout.

Grant said the Justice Department did not identify a specific target of its investigation. In court papers, he mentioned the probe as part of a discussion of antitrust claims against KKR.

Grant is seeking approval of an $89.4-million class-action settlement among shareholders, Del Monte and its financial advisor Barclays Capital, a unit of Barclays.

Shareholders accused Barclays of having a conflict of interest because it also provided financing to the KKR group.

The settlement has drawn opposition from a Cleveland pipe fitter pension fund, which contends that shareholders are being asked to give up antitrust claims that might be worth hundreds of millions of dollars.

This fund has filed a federal lawsuit in California alleging that KKR and other private equity firms rigged bids to cap the price paid for San Francisco-based Del Monte. It has until Dec. 8 to file an amended complaint after an earlier complaint was dismissed.

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