American Italian Pasta Company Investors Fight Takeover With Lawsuit

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Company Name(s): 
American Italian Pasta Company
Case Name: 
American Italian Pasta Company Deal Case 06/28/2010
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Case Status: 
Settlement Approved
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
Court of Filing: 
Delaware State Court

JULY 2010 - The lawsuit challenging Ralcorp Holding's acquisition of American Italian Pasta Co. has been settled. Ralcorp announced in filings with the Securities and Exchange Commission that the parties in the class action suit filed a memorandum of understanding on July 12 agreeing to settle the suit.

JUNE 2010 - An investor in American Italian Pasta filed a lawsuit in Delaware State Court on behalf of current investors American Italian Pasta Company (NASDAQ:AIPC) alleging breaches of fiduciary duty by certain members of the American Italian board of directors for selling American Italian Pasta Co. too cheap to Ralcorp Holdings.

According to the complaint the plaintiff alleges breaches of fiduciary duty by the Board of Directors of American Italian Pasta Company (NASDAQ:AIPC). arising out of their attempt to sell American Italian Pasta Company (NASDAQ:AIPC) to Ralcorp Holdings, Inc. at an unfair price through an unfair process.

On Monday, June 21, 2010, American Italian Pasta Company (Nasdaq: AIPC) and Ralcorp Holdings, Inc. (NYSE: RAH) announced a merger agreement under which Ralcorp will acquire all of the outstanding shares of AIPC common stock for $53.00 per share in cash, for a total purchase price of approximately $1.2 billion, net of cash acquired. According to American Italian Pasta Company its Boards of unanimously approved the agreement.

Shares of American Italian Pasta Company (AIPC) traded before the news at $41.73 per share, but climbed to its 52weekHigh of $52.95 per share after the announcement.