Bob Evans Investor Files Appraisal Suit After $1.5B Post Buyout

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By Jacob Rund

A Bob Evans Farms Inc. investor is asking a Delaware state court to determine the “fair value” of its stock in the prepackaged food distributor, which Post Holdings Inc. took private this month for about $1.5 billion.

Arbitrage Fund filed the appraisal claim Jan. 23 in the Delaware Court of Chancery to assess whether Bob Evans’ shares were appropriately priced at $77 each.

The fund says it held 767,786 shares at the time Post — maker of Grape-Nuts and Oreo O’s cereals — completed the sale Jan. 12. Shareholders of the New Albany, Ohio-based company voted Jan. 9 to approve the deal.

The lawsuit is one of the first appraisal cases filed this year and may face a tough road ahead. Recent Delaware decisions have suggested that deference should be given to the deal reached by combining companies.

In addition to the value of its shares determined by the court, the fund is asking for reimbursement of attorneys’ fees and payment of statutory interest accrued from the date of the acquisition to the payment, if any, of the shares’ fair value.

Post did not immediately respond to a request for comment.

The case is Arbitrage Fund v. Bob Evans Farms Inc., Del. Ch., 2018-0052 , filed 1/23/18.

Deal Challenges

Bob Evans Farms is facing another investor suit in the chancery court this month about the Post deal ( Knight v. Bob Evans Farms Inc., Del. Ch., No. 2018-0009, filed 1/8/18).

Investor Tanya Knight alleged in a Jan. 8 complaint that Bob Evans Farms CEO Mike Townsley supported the acquisition because he would receive more than $10 million in compensation.

Knight is demanding internal records about the sale to see whether the alleged payments tainted the deal.

To contact the reporter on this story: Jacob Rund at jrund@bloomberglaw.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bloomberglaw.com

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