CORRECTED - UPDATE 1-Del Monte, Barclays in $89.4 mln settlement
(Corrects paragraph 7 to say that shareholder vote was delayed, not forced)
* Among largest cash settlements in Delaware court
* Deal pending approval by court vice chancellor
* "Great result for stockholders"-- plaintiffs' lawyer (Adds detail after paragraph three)
Oct 6 (Reuters) - Del Monte Corp and Barclays Capital have agreed to pay $89.4 million to Del Monte shareholders in one of the largest cash settlements on record in Delaware Chancery Court, lawyers for the plaintiffs said on Thursday.
The settlement was reached with shareholders who challenged the 2010 private equity buyout of the company by a group of investors led by Kohlberg Kravis Roberts & Co LP (KKR.N).
Del Monte will contribute $65.7 million and Barclays Capital, a unit of Barclays Plc (BARC.L), will pay $23.7 million, lawyers for the plaintiffs said in a statement.
Del Monte had no comment on the settlement. Barclays did not immediately return calls seeking comment.
In the lawsuit, investors alleged that Barclays Capital, which was advising Del Monte on a sale last year, had a conflict of interests because it also arranged financing for the group of buyers that included KKR.
The settlement, subject to approval by Vice Chancellor J. Travis Laster, would resolve all litigation over the sale of Del Monte to the buyout group, the plaintiffs said.
In February, Laster delayed a shareholder vote on the deal after accusing Barclays of "secretly and selfishly manipulat(ing) the sale process to engineer a transaction" to allow Barclays to collect large financing fees.
"This case has sharply reined in certain practices within the investment banking community, where many financial advisers regularly gamed the M&A process through double-dip engagements," said Randall Baron, a partner with the law firm Robbins Geller and an attorney for the plaintiffs.
"This [is) a great result for stockholders-- not only those holding shares in Del Monte, but all public equity holders of companies involved in M&A transactions," said Stuart Grant, a partner at Grant & Eisenhofer who is also an attorney for the plaintiffs.
The case is In Re Del Monte Foods Company Shareholders Litigation, Consol. C.A. No. 6027-VCL, Delaware Chancery Court. (Reporting by Moira Herbst; Editing by Tim Dobbyn and Gerald E. McCormick)
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