(CN) – The Delaware Court of Chancery upheld the settlement between Wrigley chewing-gum company and its shareholders over Wrigley’s $23 billion merger with the Mars candy company.
The Wrigley-Mars merger sparked a series of lawsuits from Wrigley shareholders, who claimed that the company’s board of directors sold the company below market value, included improper lock-up provisions in the merger agreement and intended to send misleading proxy materials to stockholders.
A financial expert advised the plaintiffs that the merger price was fair, so they settled the class action. Vice Chancellor Lamb approved the settlement, overruling an objection from shareholders who demanded money as part of the settlement.
Lamb ruled that although stockholders did not receive money from the $80 per-share merger price paid by Mars, they did gain a 10 percent reduction in the termination fee and also received supplemental disclosures.
“Delaware courts have often approved settlements of merger class litigation that entail only non-monetary relief,” Lamb noted. “Thus, it is not adequate grounds for objection to complain that potential monetary claims are being compromised on terms that do not afford any monetary relief to the class.”