Beam Investor Sues to Block $16 Billion Sale to Suntory

A Beam Inc. investor sued to block Suntory Holdings Ltd.’s $16 billion takeover of the company, a plan that would create the world’s third-largest premium spirits company.

Shareholder Todd Miller, in a complaint filed today in Illinois state court in Chicago, claimed the $83.50-a-share deal undervalues Beam, whose brands include Maker’s Mark whiskey, Pinnacle-brand flavored vodkas and Sauza Tequila.

“The inadequacy of the proposed consideration is even more evident when one considers the substantial synergies to be enjoyed by Suntory if the proposed acquisition is consummated,” according to Miller’s complaint.

Beam and Osaka-based Suntory announced their planned tie-up on Jan. 13. In addition to the cash payment to stockholders, which has an equity value of $13.6 billion based on 163.1 million outstanding shares, the Japanese company agreed to assume the debt of its Deerfield, Illinois-based target.

The transaction represents a 25 percent premium over Beam’s Jan. 10 closing share price of $66.97.

Suntory, maker of Yamazaki whiskey and Premium Malt’s beer, is seeking to boost overseas growth as the population in its home country shrinks and ages.

Also named as defendants in Miller’s complaint are Beam Chief Executive Officer Matthew Shattock, Chairman A.D. David Mackay and six directors who he claims are breaching their fiduciary duties to shareholders and enriching themselves at investors’ expense, as well as Suntory.

Miller is seeking to sue on behalf of all holders of Beam common stock. He’s also seeking a court order blocking the transaction unless the company adopts merger procedures that will elicit the best possible outcome for shareholders.

Clarkson Hine, a spokesman for Beam, called Miller’s lawsuit “baseless and without merit.” He said the company would fight the lawsuit.

The case is Miller v. Beam Inc., 14-ch-00932, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

Before it's here, it's on the Bloomberg Terminal.