Key Takeaways:
Bleichmar Fonti & Auld is investigating Utz Brands' $14.25-per-share takeover by Intersnack Group over potential breaches of fiduciary duty.
The probe centers on whether the founding Rice and Lissette family, which will own 50% of the combined company, secured terms that shortchange public shareholders, the New York law firm said in a statement.
Utz announced July 21 a definitive agreement under which Intersnack will acquire all Class A common stock for $14.25 a share in cash, valuing the snack maker at an enterprise value of $2.9 billion. The family agreed to vote shares representing about 42% of Utz common stock in favor of the deal, lifting its collective ownership roughly 8 percentage points to 50% of the post-merger company. Public shareholders were not offered the same chance to roll their shares into the combined entity, BFA said.
The investigation could pressure the deal's timeline if shareholders challenge the terms, or weigh on UTZ stock if investors view the price as too low. Shares closed at $14.13 on Aug. 19, near the $14.25 offer, after touching a 52-week high of $14.19. The stock has gained 38.8% year to date and 55.6% over six months, according to Investing.com data.
Analysts have largely aligned their targets with the offer price. BTIG, D.A. Davidson and Jefferies all cut ratings to neutral or hold with $14.25 targets, while UBS raised its target to $14.25 from $8. Utz also declared a quarterly dividend of $0.063 a share, payable in July.
The family's dual role as seller and future owner of the combined entity is central to the probe. BFA is examining whether Utz directors or the family, as potential controllers of the corporation, breached their duties during negotiation of the merger terms. The firm is representing shareholders on a contingency basis, with no cost to investors.
The deal gives Intersnack, a European snack maker, a U.S. platform spanning Utz's portfolio of potato chips, pretzels and cheese snacks. Utz, which listed on the New York Stock Exchange in 2020, has expanded through acquisitions under the family's control.
The probe adds a layer of uncertainty to a transaction that already trades at a thin premium to the market price. Shareholders will watch for any legal challenge ahead of the vote required to approve the deal.
This article is for informational purposes only and does not constitute investment advice.
