* DOJ probing Del Monte deal, shareholders' attorney says
* DOJ has sought KKR documents in past
* Investigation came to light in settlement papers
By Tom Hals
Nov 28 The U.S. Department of Justice has
opened a probe into the $4 billion takeover of Del Monte Corp
by private equity investors led by KKR and Co ,
according to court papers regarding an investor settlement over
The department's antitrust division "has been investigating
the facts and circumstances surrounding the sale of Del Monte,"
Stuart Grant, a lawyer for Del Monte shareholders, wrote in a
Nov. 23 court filing. He said he has provided documents to the
division and is cooperating with the investigation.
Calls to the Department of Justice, KKR and Del Monte were
not immediately returned. Del Monte and KKR have said that the
U.S. Securities and Exchange Commission had issued subpoenas
for documents relating to the buyout.
Grant in an interview said the Justice Department did not
identify a specific target of its investigation. In court
papers, he mentioned the probe as part of a discussion of
antitrust claims against KKR.
Grant is seeking approval of an $89.4 million class-action
settlement among shareholders, Del Monte and its financial
adviser Barclays Capital, a unit of Barclays Plc .
Shareholders accused Barclays of having a conflict of
interest because it also provided financing to the KKR group.
The settlement has drawn opposition from a Cleveland
pipefitter pension fund, which argued that shareholders are
being asked to give up antitrust claims that might be worth
hundreds of millions of dollars.
This fund has filed a federal lawsuit in California
alleging that KKR and other private equity firms rigged bids to
cap the price paid for Del Monte. It has until Dec. 8 to file
an amended complaint after an earlier complaint was dismissed.
"It wouldn't surprise me if they were looking for more
information on what might be collusive bid-rigging," said Craig
Wildfang, a lawyer involved in the California lawsuit,
referring to the Justice Department probe.
KKR has been involved in antitrust investigations before,
having in 2006 and 2009 provided documents to the Justice
Department as part of a government investigation into private
equity firms, according to securities filings.
KKR and several other private equity firms are also
defendants in a 2007 Massachusetts federal lawsuit. They are
accused of colluding to lower the purchase prices of leveraged
buyout targets such as software company SunGard Data Systems
Inc and food service provider Aramark Corp.
Many lawyers in the California case are also involved in
the Massachusetts case.
A hearing to approve the Del Monte settlement is scheduled
for Thursday in front of Judge Travis Laster in Wilmington.
The case is In Re Del Monte Foods Co Shareholders
Litigation, Delaware Chancery Court, No. 6027.