Beam sued over its proposed US$16B takeover by Suntory Holdings by investor who says transaction being driven by Beam's largest shareholder; company says lawsuit baseless, without merit

Nevin Barich

NEW YORK , January 23, 2014 (Bloomberg LP) – Beam Inc. was sued over its proposed $16 billion takeover by Suntory Holdings Ltd. by an investor who said the transaction is being driven by the company’s largest shareholder, hedge-fund manager Bill Ackman.

The NECA-IBEW Pension Trust Fund filed the suit today in Circuit Court of Cook County, Illinois, saying the proposed transaction is the product of a “hopefully flawed process” that is designed to ensure the sale on Beam to Suntory “on terms preferential to defendants and other Beam insiders.”

The fund said in its complaint that the transaction undervalues the company and is being engineered by Ackman, who will receive more than $1.73 billion if it closes. Ackman’s Pershing Square Capital Management LP holds about 13 percent of the shares of Deerfield, Illinois-based Beam. Ackman isn’t named as a defendant in the suit, which seeks class-action status.

“In the last six months alone, Ackman and Pershing Square have lost approximately $1 billion on very public investments in J.C. Penney Co. and Herbalife Ltd., and now Ackman seeks liquidity for his illiquid Beam holdings,” the fund said in the suit. “The proposed acquisition offers that liquidity, and if it closes, Ackman will receive over $1.73 billion from the deal.”

Suntory said Jan. 13 it agreed to buy Beam, the maker of Jim Beam and Canadian Club liquor, for $16 billion including debt.

The suit is baseless and without merit, Clarkson Hine, a spokesman for Beam, said in an e-mail. Norman Rifkind, an attorney representing the pension fund, didn’t immediately return a voice-mail message seeking further comment. Carolyn Sargent, a spokeswoman for Pershing Square with Rubenstein Associates Inc., didn’t immediately comment on the suit.

The case is NECA-IBEW Pension Trust Fund v. Beam Inc., 14- ch-01175, Circuit Court of Cook County, Illinois, County Department, Chancery Division.

--With assistance from Katherine Burton in New York. Editors: Mary Romano, Charles Carter

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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