asset acquisitions - Jackson Walker LLP

stockholders ratified the merger agreement and authorized its management to takewhatever action was needed to close the transaction.During the spring of 2001, Tyson began to suffer buyer’s remorse because ofdismal business performance by both Tyson and IBP due in large part to a severe winter,which adversely affected livestock supplies.At the same time, IBP was struggling to resolve issues that had been raised aboutit financial statements by the SEC in connection with proxy materials previously filed forthe leveraged buyout, including how to report the problems at DFG. The SEC first raisedthese issues in a faxed letter on December 29, 2000 to IBP’s outside counsel. NeitherIBP management nor Tyson learned of the SEC’s letter until the second week of January2001. Even after learning of the letter, Tyson management had put the MergerAgreement to a successful board and stockholder vote.On March 29, 2001, Tyson gave notice that it was terminating the MergerAgreement and suing in Arkansas for damages for breach of contract. IBP’s statedreasons for terminating the Merger Agreement were that it was induced to enter into theMerger Agreement based on misleading information in IBP’s financial statements thatwere restated after the Merger Agreement was signed and that IPB failed to provideTyson with an SEC comment letter issued by the SEC on December 29, 2000 that raisedimportant issues about IBP’s financial statements. Tyson’s notice of termination did notallege any material adverse change in IBP’s business and stated.Tyson Foods ... will issue a press release today announcingdiscontinuation of the transactions contemplated by the Agreement andPlan of Merger dated as of January 1, 2001 among IBP, inc. (“IBP”) andTyson (the “Merger Agreement”). We intend to include this letter with ourpress release.On December 29, 2000, the Friday before final competitive negotiationsresulting in the Merger Agreement, your counsel received comments fromthe Securities and Exchange Commission (“SEC”) raising important issuesconcerning IBP's financial statements and reports filed with the SEC. Asyou know, we learned of the undisclosed SEC comments on January 10,2001. Ultimately, IBP restated its financials and filings to address theSEC's issues and correct earlier misstatements. Unfortunately, we reliedon that misleading information in determining to enter into the MergerAgreement. In addition, the delays and restatements resulting from thesematters have created numerous breaches by IBP of representations,warranties, covenants and agreements contained in the Merger Agreementwhich cannot be cured.Consequently, whether intended or not, we believe Tyson Foods, Inc. wasinappropriately induced to enter into the Merger Agreement. Further, webelieve IBP cannot perform under the Merger Agreement. Under thesefacts, Tyson has a right to rescind or terminate the Merger Agreement andto receive compensation from IBP. We have commenced legal action inArkansas seeking such relief. We hope to resolve these matters outside3068470v1Appendix H – Page 2