By Andrew Harris
May 1 2008 (Bloomberg) -- William Wrigley Jr., chairman of the chewing-gum maker bearing his name, is one of 10 directors sued by a shareholder claiming the board failed to get the best price when it agreed to a $23 billion buyout by Mars Inc.
Mars, backed by billionaire Warren Buffett, this week announced an agreement to buy Chicago-based Wm. Wrigley Jr. Co. for $80 a share, 28 percent more than its April 25 closing price. The resulting closely held business would be the world's largest candy company.
In a complaint filed yesterday in the U.S. District Court in Chicago, shareholder Robert Garber of Pennsylvania said the Wrigley board agreed to sell at a time when shares were expected to rise, keeping smaller investors from sharing in the bounty.
``The Wrigley Board has a fiduciary duty to conduct a fair process in seeking the best possible price to maximize the value of the company's shares,'' Garber said in his complaint.
While Wrigley is best known for its gum, Lifesaver roll candy and Altoids mints, McLean, Virginia-based Mars is the maker of M&Ms candies, Mars chocolate and nougat bars and Starburst fruit chews.
The purchase will be financed with $11 billion from Mars, $4.4 billion from Berkshire and $5.7 billion from Goldman Sachs Group Inc. Berkshire will also buy a $2.1 billion stake in the Wrigley division once the purchase is completed.
The derivative lawsuit, filed against the directors on the company's behalf, accuses the chairman and the other directors of abusing their controlling positions. Garber seeks class- action, or group status, enabling him to sue on behalf of all Wrigley shareholders, and a court order nullifying the sale.
Chris Perille, a spokesman for Wrigley, said he hadn't seen Garber's complaint and couldn't comment on it.
The case is Garber v. Wrigley, 08cv2449, Northern District of Illinois, Eastern Division (Chicago).
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