The battle between Anderson Clayton & Co. of Houston and the Gerber Products Co. ended Monday, handing Wall Street arbitrageurs substantial losses in the flurry of selling that greeted the announcement.
Anderson Clayton, a food processing conglomerate that is also one of the largest coffee import houses in the U.S., withdrew its offer because of the lengthy legal battles it faced. T. J. Barlow, chairman of the Texas company, said the decision to abandon the takeover followed a decision by a federal court judge in Michigan to break the lawsuits into two parts, each with separate trials.
The withdrawal, however, also followed widespread reports that one of the largest European firms, Unilever, Ltd., had made inquiries about acquiring Gerber as early last April. Wall Street sources said Gerber had indicated that it would ask Unilever to make a bid if it successfully defeated Anderson Clayton's offer.
On Monday, a Gerber statement said the Anderson Clayton withdrawal was a vindication of Gerber's position tha t the acquisition would have violated antitrust and securities laws.
Gerber faces several class action shareholder lawsuits seeking compensation of more than $100 million for the company's refusal to accept Anderson Clayton's first aid of $40 a share, when Gerber's stock was trading at $32.
Anderson Clayton dropped its offer to $37 a share on Aug. 1 following the release of Gerber's first quarter earnings, which were down from last year.
In heavy trading yesterday, Gerber's stock plummeted more than $6 to close at $28.25.Brokerage sources said the losses for arbitrageurs, most of whom were betting that Anderson Clayton would sit out the legal battles and eventually raise its offer again, could total $10-to-$15 million.