H.J. Heinz Acquisition

On April 29, 2013 Pennsylvania Court Judge Christine Ward dismissed seven consolidated shareholder derivative and purported class action lawsuits, clearing the way for the successful shareholder vote on the acquisition of H.J. Heinz by Berkshire Hathaway and 3G Capital. Plaintiffs claimed, among other things, that a variety of deal protection provisions, including termination fees, a matching provision, a no solicitation provision, and the absence of either a pre-signing or post-signing “market check” precluded other potential acquirers from bidding to acquire Heinz and resulted in a low merger consideration. Compass Lexecon has extensive experience analyzing these types of claims and on a compressed schedule was able to marshal both theoretical and empirical evidence on deal protection provisions. Professor Kenneth Lehn submitted an Affidavit on behalf of Heinz and its Board demonstrating that target company shareholders can receive economic benefits from deal protection provisions, that such provisions are commonplace in large transactions, and that they do not preclude topping bids whether or not there was an explicit market canvass by the company. The team that supported Professor Lehn was led by David Gross and included Jonathan Polonsky and David Strahlberg in the Chicago office. Heinz and its Board were represented by Thomas Allen and Roy Arnold of Reed Smith LLP and Lawrence Portnoy, Scott Luftglass, Brian Burnovski, and George Turner of Davis Polk & Wardwell LLP.