INDIANAPOLIS -- Marsh Supermarkets Inc.'s board of directors on Monday took action under its merger agreement with MSH Supermarkets Holding Corp., an affiliate of private investment fund Sun Capital Partners Group IV LP, to reject the higher offer from a second bidder to take over the financially troubled grocery chain.
The board said it had to oppose the offer because that bid violated an agreement the company had with potential buyers as it solicited bids to not make buyout attempts for Marsh without its consent, according to the Associated Press.
Marsh on April 20 announced that it had agreed to be acquired by private investment fund Sun Capital Partners Inc., which would pay $11.125 cash per share for all of Marsh's outstanding stocka deal worth nearly $88 million. But a new offer made May 30 by from Drawbridge Special Opportunities Advisors and Cardinal Paragon Inc. would pay $13.625 per share, or more than $107 million.
Marsh said Monday that its deal with Sun Capital prohibited it from considering the new bid without Sun Capital's consent.
The agreement also gives Sun Capital the right to call off the merger and receive a $10 million termination fee from Marsh if the company did not announce its opposition to a competing offer within 10 business days.
A statement by Marsh said that given the uncertainty of the competing transaction and the adverse consequences from failing to announce opposition within the 10 business day period its board would oppose the second offer.
Marsh is a regional company operating 69 Marsh supermarkets, 38 LoBill Foods stores, eight O'Malia Food Markets, 154 Village Pantry convenience stores and two Arthur's Fresh Market stores in Indiana, Illinois and western Ohio. It also operates Crystal Food Services, which provides catering, cafeterias management, office coffee, coffee roasting, vending and concessions and restaurant management; and Primo Banquet Catering & Conference Centers, Floral Fashions, McNamara Florist and EnfloraFlowers for Business.
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