<p>On Wednesday, August 6th, 2008, a W.M. Wrigley Jr. Co. (NYSE:WWY) shareholder has filed a lawsuit in state court in Chicago against Goldman Sachs &amp; Co. Inc. alleging Goldman Sachs had a number conflicts of interest which prevented it from rendering unbiased financial advice or issuing an unbiased fairness opinion in the $23 billion merger between chewing-gum maker W.M. Wrigley Jr. Co. and candy maker Mars Inc.</p> <p> </p>
<p style= text-align: justify; >The stockholder accuses New York investment bank Goldman Sachs &amp; Co. had “severe” conflicts of interest by working for both companies involved in the deal. According to the complaint Goldman Sachs entered in April of 2008 into a letter of engagement with Wrigley under which it acted as a financial advisor to Wrigley’s board of directors, on behalf of and for the benefit of Wrigley’s public shareholders, in connection with, and participated in certain of the negotiations leading up to, a merger agreement among Wrigley, Mars, Inc. and certain subsidiaries of Mars, Inc. Within the $46 million fee agreement a “principal portion of Goldman Sachs’ compensation from Wrigley was contingent on a sale occurring” and Goldman Sachs was asked to evaluate the deal and advise Wrigley’s board of directors whether the $80 per share price was “fair from a financial point of view”, so the plaintiff. Wrigley’s board allegedly considered the financial analysis presented by Goldman Sachs as well as Goldman Sachs’ Fairness Opinion in making its recommendation that Wrigley’s shareholders vote for the adoption of the merger agreement. The Plaintiff claims, affiliates of Goldman Sachs also entered into financing commitments to provide financing and other services to Mars in connection with the consummation of the merger agreement, for which they will receive fees. According to the complaint by advising Wrigley on the acquisition by Mars Inc. while it was working for Mars Inc. Goldman Sachs &amp; Co. was a conflict of interest, breach of contract and breach of its fiduciary duty. The plaintiff alleges that Goldman Sachs Goldman concealed from Wrigley how much it had been paid by Mars in the past and its specific plans working for Mars in the future. The plaintiff alleges that Goldman Sachs interest in maintaining its relationships with Mars and Berkshire Hathaway (a proposed 19%-owner of Wrigley) kept it from offering an accurate fairness opinion to Wrigley. Reportedly Goldman Sachs spokeswoman Andrea Rachman said she was unaware of the lawsuit and couldn’t comment on it and Wrigley spokesman Chris Perille also declined to comment on the lawsuit.</p>
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<p style= text-align: justify; >W.M. Wrigley Jr. Co., known for its gum, Lifesaver roll candy and Altoids mints, agreed to be bought by closely held Mars Inc. on April 28th, 2008 for $23 billion. The new company would be the world’s largest candy company with about 14 percent of the world’s candy market. Mars, known for its M&amp;Ms candies, Mars chocolate and nougat bars and Starburst fruit chews, agreed to pay Wrigley shareholders $80 per share in cash. According to the terms of the deal, Mars will pay $11 billion, Goldman Sachs contributed $5.7 billion in committed senior debt and Berkshire Hathaway with its CEO and Chairman Warren Buffett will provide $4.4 billion in subordinated debt.</p>
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<p style= text-align: justify; >According to W.M. Wrigley Jr. Co. its shareholders are scheduled to vote about the acquisition on September 25th, 2008. In June 2008, a shareholder sued Wrigley Chairman William Wrigley Jr. and nine corporate board members, claiming they too had conflicts of interest preventing them from doing what was best for shareholders.</p>