Gold Kist, Inc., Atlanta, announced that it has filed a lawsuit in federal court in the Northern District of Georgia seeking to enjoin Pilgrim’s from proceeding with its unlawful solicitation of Gold Kist stockholders.
Their shareholders were told not to sell their shares to the No. 2 poultry processor, Pilgrim's Pride Corp. According to CEO John Bekkers the board unanimously determined that the offer is inadequate and does not fully reflect the value of Gold Kist, including the company's strong market position and future growth prospects.
Pilgrim's Pride offered shareholders $20 per share, and launched an effort to buy Gold Kist bonds, whereas Gold Kist shares recently have been trading above $20.
The key term of the bid, election of Pilgrim's officers to the Gold Kist board of directors, led to the lawsuit. Gold Kist alleges that this attempt is in violation of federal antitrust laws, specifically Section 8 of the Clayton Act, which stipulates that no one can simultaneously be a director or officer at two competitive companies of a certain size within certain proximity.
Source: Gold Kist, Inc.