May 27, 2014 (Shareholders Foundation) - An investor, who currently holds shares of Pinnacle Foods Inc (NYSE:PF) filed a lawsuit in effort to halt the takeover of Pinnacle Foods Inc by Hillshire Brands Company for a value of approximately $36.48 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:PF stockholders by agreeing to sell Pinnacle Foods Inc too cheaply via an unfair process to Hillshire Brands Company.

On May 12, 2014, the Hillshire Brands Company (NYSE: HSH) and Pinnacle Foods Inc. (NYSE: PF) announced that they have entered into an agreement under which Hillshire Brands will acquire all outstanding shares of Pinnacle Foods in a cash and stock transaction. Under the terms of the agreement, each share of Pinnacle Foods common stock will be exchanged for $18.00 in cash and 0.50 shares of Hillshire Brands common stock, or for a total consideration of approximately $36.48 per NYSE:PF share.

However, the plaintiff claims that the offer is too low and undervalues Pinnacle Foods Inc. Indeed, Pinnacle Foods Inc reported that while its Total Revenue declined from $2,469.56 million for the 52 weeks period that ended on Dec. 25, 2011 to $2,463.80 million for the 52 weeks period that ended on Dec. 29, 2013 its Net loss of $46.91 million for the 52 weeks period that ended on Dec. 25, 2011 turned into a Net income of $89.35 million for the 52 weeks period that ended on Dec. 29, 2013. Shares of Pinnacle Foods Inc (NYSE:PF) grew from $22.21 per share in March 2013 to as high as $30.57 per share on May 2, 2014.

In addition, the plaintiff alleges that the process is also unfair to Pinnacle Foods stockholders.
Indeed, in conjunction with the agreement, certain affiliates of Blackstone, which collectively hold approximately 51% of Pinnacle Foods’ outstanding common stock, have already entered into a voting agreement and, subject to its terms and conditions, agreed to vote their shares in favor of the transaction.

On May 23, 2014, NYSE:PF shares closed at $33.27 per share.