CHICAGO (CN) – Corn Products International is selling itself too cheaply to Bunge Ltd. – for $4.8 billion – after nine consecutive quarters of record sales and demand for its products growing, for food and ethanol, shareholders say in a class action in Cook County Court.
Shareholders sued the 10 directors of Corn Products International (CPO), which was founded in 1906 and is based in Westchester, Ill. Bunge’s buyout, if accepted, would create the third-largest agribusiness company in the United States. Bunge offered CPO shareholders $56 per share; CPO shareholders would end up owning 21 percent of Bunge if the deal goes through.
“Bunge’s purchase of CPO is opportunistic and at an unfair price,” the complaint states. “World demand is soaring and food prices are rising. According to a June 23, 2008, Reuters report of the transaction, ‘the deal comes as ethanol production, as well as demand for food in developing economies such as India and China, is driving up prices for corn. Corn prices in the United States have topped $7 per bushed this month, about double the levels of a year ago, as flooding in the Midwest has wiped out wide swathes of agricultural production.’ …
“CPO recently reported its ninth consecutive quarter of record sales and a 29% increase in net income over the same period in the prior year. On April 22, 2008, the company significantly increased its earnings and revenues forecast, expecting earnings to increase 12-22% and revenues to top $4 billion.”
Plaintiffs are represented by Wolf Haldenstein Adler.