Gardner Denver Inc. was sued by an investor claiming KKR & Co.’s planned $3.7 billion buyout undervalues the industrial-equipment maker.
Gardner Denver directors breached their fiduciary duties by accepting an insufficient offer that furthers the interests of a majority stakeholder, investor Daniel White said in a complaint filed yesterday in Delaware Chancery Court. White blamed the proposed deal on pressure from ValueAct Holdings LP, the company’s third-largest investor. ValueAct isn’t named as a defendant in the case.
The sales process “was being run in an unnecessarily hurried fashion which deprived the board of the opportunity to make a fully informed decision and ultimately favored KKR’s offer,” White said in his complaint.
KKR, the New York-based private-equity firm run by Henry Kravis and George Roberts, announced March 8 that it would pay $76 a share for Wayne, Pennsylvania-based Gardner Denver after raising its offer from $75 a share. The deal, expected to close in the third quarter, is valued at $3.9 billion including the assumption of Gardner Denver’s debt.
Vikram Kini, a Gardner Denver spokesman, didn’t immediately respond to a call today seeking comment on the complaint.
Gardner Denver began reviewing a sale after ValueAct pressed for a deal. The sale to KKR comes after rival SPX Corp. and private-equity firms Advent International Corp. and the team of Onex Corp. and TPG Capital walked away from takeover discussions.
“Ceding to the demands of ValueAct, the board is allowing KKR to acquire the company at an inadequate price,” White said in the complaint.
White is seeking to represent all Gardner Denver shareholders in his bid to bar the transaction.
The case is White v. Larsen, CA8439, Delaware Chancery Court (Wilmington)