Zhongpin Inc., the Chinese pork processor whose chief executive officer offered to buy the shares he doesn’t already own for about $418 million, was sued by an investor who says he’ll be shortchanged in the deal.
Philip Meeks contends in a Delaware Chancery Court lawsuit made public today in Wilmington that shareholders deserve more than the $13.50 per-share offer from Xianfu Zhu.
The offer “represents wholly inadequate consideration in light of the company’s intrinsic value and future prospects,” lawyers for Meeks said in court papers.
The Changge, China-based company’s CEO, who holds more than 17 percent of the stock, last month offered to pay cash for the remainder at a 39 percent average premium at the time.
Shares of the company fell 34 cents or 3 percent to $10.62 in Nasdaq stock market trading in New York at 10:10 a.m.
Zhongpin distributes food to 20 provinces and 3,400 retail stores in China, and exports products to other parts of Asia and to Europe, according to the complaint.
Warren (Feng) Wang, chief financial officer of Zhongpin, didn’t immediately return an e-mailed message and didn’t answer a phone call seeking comment on the lawsuit after business hours in Beijing.
The case is Phillip Meeks v. Xianfu Zhu, CA7393, Delaware Chancery Court (Wilmington).