KKR Says It Has Enough Borden Shares for Merger
COLUMBUS, Ohio — The New York investment firm Kohlberg Kravis Roberts & Co. is ready to stamp its brand on Elsie the Cow.
The firm said Wednesday that it has acquired more than enough shareholder support to force a merger with Borden Inc. Rival suitor Paul Kazarian, meanwhile, bowed out of the competition.
KKR gathered more than 90 million shares, or 63.5%, of Borden stock by the time its exchange offer expired at midnight Tuesday. KKR needed at least 40% of Borden stock to cement the $1.8-billion deal.
When KKR exercises an affiliate’s option to buy another 28.1 million shares from Borden, it will control about 69.5% of the Columbus-based company.
To formally complete the deal, KKR also needs Securities and Exchange Commission approval and a yes vote from two-thirds of the holders of outstanding Borden shares--a mere formality with KKR’s acquisition of stock.
The merger is likely to be completed next year, KKR spokeswoman Ruth Pachman said.
Borden, the troubled dairy and food products company that owns the Prince pasta, Cracker Jack snacks and ReaLemon juice brands, has lost $1 billion in the last two years due to stiff competition and high costs.
KKR signed a stock swap deal in September to buy Borden for about $2 billion, or $14.25 a share. KKR’s payment would be in the form of stock in RJR Nabisco Holdings, the food and cigarette conglomerate it controls.
Kazarian’s company, Japonica Partners, wanted to buy 25% of Borden for $430 million, or $17 a share, in cash.
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